In a sweeping move to reinvigorate its beleaguered property market, the Hong Kong government has announced the complete removal of all remaining property cooling measures, effective immediately. The decision, unveiled during the Financial Secretary's mid-year economic review, eliminates the Special Stamp Duty, the Buyer's Stamp Duty, and the New Residential Stamp Duty that have been in place in various forms since 2010.
A Market in Need of Stimulus
The policy reversal comes after Hong Kong's residential property prices declined for the third consecutive year, falling approximately 18 per cent from their 2021 peak. Transaction volumes in the first quarter of 2026 slumped to their lowest level in nearly two decades, with just 8,200 residential units changing hands — a 25 per cent drop from the same period last year.
"The market has been in a prolonged downturn, and the cooling measures that were designed for a very different era are now acting as a drag on recovery," said Financial Secretary Paul Chan in a press briefing. "By removing these barriers, we aim to restore confidence and liquidity to the property market."
The removal of the Buyer's Stamp Duty, which had imposed a 15 per cent surcharge on non-permanent resident purchasers, is expected to have the most immediate impact. Mainland Chinese buyers, who historically accounted for up to 30 per cent of new-home purchases, had largely retreated from the Hong Kong market in recent years due to the combined effect of stamp duties and economic headwinds on the mainland.
Developers Welcome the Decision
Major Hong Kong developers responded positively to the announcement. Shares of Sun Hung Kai Properties, CK Asset Holdings, and Henderson Land Development all rose between 3 and 6 per cent in morning trading following the news. Several developers also indicated they would accelerate the launch of new residential projects that had been held back due to weak market sentiment.
"This is exactly what the market needed," said Raymond Cheng, managing director of a leading property agency. "We expect a significant pick-up in both primary and secondary market activity over the coming months. Buyers who have been sitting on the sidelines will now have a strong incentive to move."
Risks and Concerns
Not everyone is celebrating, however. Housing advocates have raised concerns that the removal of cooling measures could exacerbate affordability challenges for first-time buyers if prices rebound sharply. Hong Kong already ranks as one of the most expensive housing markets in the world, with the median home costing approximately 16 times the median household income.
"The government needs to ensure that any recovery benefits ordinary Hong Kong residents, not just investors and speculators," cautioned a spokesperson for a local housing advocacy group. "Without adequate supply-side measures, simply removing demand-side curbs risks inflating prices again."
The government has sought to address these concerns by simultaneously announcing an increase in public housing construction targets and the release of additional land for residential development in the Northern Metropolis area.
What It Means for the Market
Property analysts are broadly optimistic that the policy change will mark a turning point for Hong Kong's residential market. Most expect transaction volumes to recover by 20 to 30 per cent in the second half of 2026, with prices stabilising before potentially recording modest gains.
The key question is whether the removal of cooling measures alone will be sufficient to counteract the structural headwinds facing the market, including high interest rates, geopolitical tensions, and the ongoing migration of residents and businesses to other regional centres. For now, though, the market has received the boost it has been waiting for.
