Lower stamp duties for specific property transactions in Hong Kong are forecast to be announced in Wednesday’s annual policy statement.

Hong Kong Chief Executive John Lee, speaking the day before his policy statement, said the focus will be on stimulating the economy and improving citizens’ livelihoods.

In regard to the property market, local media reports suggest Lee may cut stamp duties for certain property transactions.

Homeowners and the business community are urging the government to roll back measures aimed at reducing speculative activities in the market.

House prices soared almost 300% in the 10 years to 2019, when Hong Kong was shaken by anti-government protests and the pandemic.

Property prices have since declined 13%, Reuters news agency reports, amid soaring interest rates and a bleak economic outlook.

In August this year, house prices fell to a seven-month low and are forecast to lose 5% by the end of this year.

Furthermore, transaction volumes have declined, highlighting weaker sentiment. The number of mortgage loans in negative equity cases is forecast to surpass 10,000 in September, nearing an 18-year top registered in Q4 2022.

“Even if the government reviews and relaxes certain stamp duty measures in the future, although this may bring stability and restore some confidence among potential buyers during the downward cycle, we believe that property prices will continue to fluctuate for a while,” according to Rosanna Tang, Hong Kong head of research at property consultancy Cushman & Wakefield.

Hong Kong’s economy is forecast to grow 4% in 2023 after a 3.5% contraction last year, the Reuters report adds.

In 2022, Lee unveiled a series of measures aimed at attracting top talent to the city. Although these schemes have had a degree of success, applicants have primarily been from mainland China.

However, despite attempts to boost Hong Kong’s global reputation, additional security legislation is expected to be passed in the near term.