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Hong Kong has lowered the minimum qualifying amount for residential property purchases under its New Capital Investment Entrant Scheme from HKD 50 million to HKD 30 million (USD 3.9 million). The move aims to revive the city's struggling housing market, where prices remain near their lowest since 2016. Applicants must still meet the HKD 30 million total investment threshold, with only up to HKD 10 million allowed in residential property, the rest in financial assets. While the change may attract some high-net-worth investors to luxury homes, analysts warn that oversupply and weak economic conditions will limit impact, requiring broader demand-boosting measures.
Hong Kong's Chief Executive, John Lee, announced that the minimum qualifying amount for residential property purchases under the New Capital Investment Entrant Scheme has been cut to HKD 30 million (around USD 3.9 million) from HKD 50 million. The change is part of efforts to stimulate activity in the city's property market, which has been under pressure from prolonged oversupply and weak economic conditions. Advertisement
Applicants under this scheme are still required to invest in other eligible asset classes, including equities, debt securities, or other financial instruments, to meet the minimum total investment of HKD 30 million. However, the government has retained a restriction that only up to HKD 10 million worth of residential property can be counted towards this total investment figure.
Market observers have raised doubts over the likely impact of the policy change. Residential prices remain close to their lowest levels since 2016, indicating subdued demand. Similar interventions in the past, such as tax relaxations and easing of mortgage lending norms, have delivered limited improvement in buyer sentiment or transaction volumes in the housing market.
Lowering the qualifying threshold for property investments under Hong Kong's investor visa scheme may attract some high-net-worth individuals to the luxury residential segment. However, with fundamental challenges like excess housing stock and a sluggish economy continuing to weigh down the market, the policy shift alone may not be enough to drive a meaningful turnaround. A broader mix of demand-boosting measures will likely be needed to revive market confidence and price growth.
Source: Bloomberg
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