Real estate price curbs fueling housing supply shortage

Also deter homeowners from selling their properties.

Property advisors Jones Lang LaSalle, Inc. instead recommends the government replace the extra tax imposed on all homes resold within three years after purchases with a capital gains tax, and scrap a February order that doubled stamp duty taxes on all properties.

Home prices in Hong Kong have more than doubled since early 2009 to become the world’s most expensive. The massive price hikes provoked a series of government curbs as the risks of a property bubble increased.

Chief Executive Leung Chun-ying earlier said the government will ignore pressure to remove the measures until there’s a steady supply of new homes.

JLL, however, believes the measures are making it more costly to sell homes. It noted that many people don’t realize housing supply not only comes from new units, but from existing units as well. All the government measures have done is to stifle transactions and is not helping people buy their own homes.

Home transactions in Hong Kong fell for a third consecutive month in May. Prices have dropped a scant 1% from March.