(Bloomberg) – Hong Kong plans to expand plans to attract wealthy immigrants to buy luxury homes in a bid to strengthen its position as an urban center and support its struggling real estate sector.
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Chief Executive John Lee said the company would expand its migration program to include some property purchases as part of a required HK$30 million ($3.86 million) investment. In his annual policy speech on Wednesday, he said the purchase of a home costing more than HK$50 million would meet one-third of that requirement.
Mr Lee aims to boost the economy by around $400 billion after a national security law cementing Beijing’s authority over the former British colony, a move that has hampered open debate in Asia’s financial hub. It has been criticized by Western governments for being
Strong exports helped the city’s economy grow within the official range of 2.5% to 3.5% for the first half of the year, although falling property prices and sluggish consumption weighed on sentiment.
Hong Kong plans to lower taxes on spirits to boost its reputation as a top nightlife and dining destination, Bloomberg News previously reported. The measures could help revive sales at restaurants and retail stores, which have suffered from a drop in consumption, which accounts for more than half of economic growth.
China’s slowdown and geopolitical uncertainty are also clouding Hong Kong’s growth prospects. The Chinese government’s recent major economic stimulus package, along with the US Federal Reserve’s interest rate cuts, may provide some reassurance.
To support the real estate market, the Lee government has removed most home purchase restrictions and reduced real estate purchase taxes over the past year. Prices rebounded slightly early this year, but have since continued to fall to their lowest level since 2016.
A series of bankruptcies shows that corporate finances are being undermined. Retail sales and tourist numbers remain below pre-pandemic levels, and the city’s image has taken a hit during this period due to strict quarantine measures and a crackdown on pro-democracy political opposition.
According to the South China Morning Post, Lee plans to revamp the HK$2 billion ($258 million) Innovation and Technology Venture Fund to attract more investors. Citing anonymous sources, the paper also reported on additional measures to diversify the economy, including boosting the medical and biotechnology sectors.
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–With assistance from Shawna Kwan.
(Updated initial policy address details)
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