Hong Kong to spend more on tourism

Wednesday, February 28, 2024

Hong Kong government has announced the lifting of restrictions on property transactions, a strategy aimed at reviving the property market that has seen a significant downturn, reaching a seven-year low in home prices.

This decision, disclosed by Finance Minister Paul Chan during the budget speech, is part of a broader economic recovery effort that also includes an increase in spending on tourism promotion.

The property market in Hong Kong had been under stringent controls, including additional taxes designed to temper the overheated market.

These measures have been abolished immediately, responding to the prolonged decline in home prices over nine consecutive months and a stagnation in share prices amidst a backdrop of increasing concerns over the tightening of freedoms in the territory.

The removal of a 15% stamp duty for non-permanent residents and for second property purchases, as well as the duty on sales of homes bought less than two years prior, are among the significant curbs lifted.

The Hong Kong government’s approach extends beyond just the property market adjustments. Anticipating further easing in property lending under the condition of banking system stability, these steps reflect a comprehensive strategy to stabilize and stimulate the economy.

The Hong Kong property sector has responded positively to the news, with notable jumps in the share prices of leading developers, signaling investor confidence in the market’s recovery potential.

Tourism, another critical pillar of Hong Kong’s economy, has also received significant attention in the recovery plan. Efforts to revamp the city’s iconic Victoria Harbor light show and introduce monthly pyrotechnic and drone displays aim to enhance Hong Kong’s appeal as a tourist destination.

An additional investment is designated for promoting major events and developing a new tourism brand, emphasizing activities like hiking and cycling, to attract visitors with a “soft-sell” approach. Collaborative tourism initiatives with mainland Chinese cities are also part of the plan to leverage the Greater Bay Area’s potential, responding to the predominance of mainland Chinese tourists in Hong Kong’s visitor demographics.

These measures, unfolding against the backdrop of the post-1997 changes in Hong Kong’s political and social landscape, mark a pivotal effort by the government to navigate economic challenges, aiming to restore growth and stability in the property and tourism sectors.

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