Introduction: When a shackle is removed, will all birds fly?
"Hey, Mr. Chen, all the hot tricks have been withdrawn. Why don't you go check out the properties soon?" "Withdraw the hot spots? After waiting for so many years, I feel that now I am entering the market as if I am not surprised by the hot tricks before."
This conversation reflects the most mysterious phenomenon in the current Hong Kong property market: the favorable policies have turned into psychological doubts**. In the "hot trick" era (SSD, BSD, AVD) that has lasted for more than ten years, everyone is accustomed to the government "suppressing" demand. Therefore, investors generally feel that "you will make money if you buy it" because the government is helping to block potential buyers.
But when all the shackles of stamp duty disappeared in an instant and the real estate market became a real "free arena," buyers who were originally looking forward to "getting rid of the hotness" fell into deep collective anxiety. Why? Because the shackles are gone, the original "excuse" to suppress prices also disappears. If property prices continue to fall without any measures, that is a real collapse of confidence.
As an "old expert" who has been in the real estate industry for 15 years, I have experienced SARS and the financial tsunami, and I have also experienced hot tricks from scratch to nothing. Today, I will reveal the trump card of this "psychological warfare" and see what the soul of the market is thinking after the withdrawal of spicy food.
Part One: Analysis of Core Concepts - Hard Landing from "Scarcity Expectation" to "Real Supply and Demand"
The withdrawal is not only a saving of hundreds of thousands in stamp duty, it is also a major handover of market pricing power:
1. The end of the dinosaur effect: buyers are no longer “impulsive”
In the past, there were harsh tricks (such as heavy taxes on SSD houses purchased within three years), which artificially created "liquidity dryness." When buyers buy a property, because they know they cannot sell it easily within three years, they will give themselves a psychological hint of "holding it for a long time and winning without doubt". Withdraw now and buy and sell at any time (although there are legal fees). This "freedom" actually scares buyers with weak self-discipline - "What if I buy today, and my neighbor who is in need of money tomorrow will cut the price and leave?"
2. The psychological game of "mainland tourists" after the removal of BSD
It was originally thought that the removal of overseas and non-first-time home buyer stamp duty (BSD) would trigger a frenzy among mainland buyers. But the reality is that the psychology of mainland buyers is also changing. They changed from "buying Hong Kong for capital allocation" to "buying Hong Kong for asset quality." The current psychology is that the Hong Kong property market is no longer a stable "safe deposit box", but a "high-risk, high-priced" volatile asset.
3. The transition from "the loser is worse than the loser" to "catching the baton"
Hong Kong people used to be most afraid of not being able to buy. Now that the market has been withdrawn, the number of listings has increased significantly (many property owners want to take advantage of this opportunity to escape), and the psychology of buyers has changed from FOMO (fear of missing out) to FOBI (fear of buying expensive, and fear of catching fire). This psychological gap from "demand exceeds supply" to "choosing more than buying" is the fundamental reason why the current trading volume cannot continue to erupt.
:::tip 💡 Expert Tip: The 'policy bottom' usually precedes the 'psychological bottom.' Government easing of policies constitutes the policy bottom, but market confidence requires a 'recovery period' of 6-12 months to establish the psychological bottom. During this time, trading volume is usually 'shrinking and consolidating.' :::
Part 2: Practical case sharing - the game between "deserters" and "surprise soldiers"
Let’s look at a typical “after spicy withdrawal” transaction case.
Case analysis: The performance of a large housing estate in the first week of withdrawal
One owner originally did not dare to sell his house even if he urgently needed funds due to SSD restrictions. That night, he immediately lowered the asking price by 5% and placed the order. Buyers’ reaction: Buyers who were originally interested in this unit stopped bidding when they saw the owner taking the initiative to reduce the price. Their mentality is: "The owner is so anxious, there must be some relief!" Owner’s reaction: Seeing no one bid, the owner became even more panicked and then slashed the price a second time.
Pro-tips:
If you are an investor planning to make arrangements after the withdrawal, please refer to this psychological game list:
- Look for areas with "stable stock holdings": Avoid areas where a large number of "urgent offers" suddenly appear after the withdrawal, where the psychological defense line has collapsed.
- Observe the "premium difference" in the second-hand market: If the second-hand house price has been lower than the new one (inverted), it means that the psychological bottom of the area is close to being formed.
- Use "tax-free" dividends for multi-property layout: For long-term investors, the biggest advantage of withdrawing is not the tax saving, but that you can flexibly hold properties in different "names" without having to bear punitive expenses.
:::highlight 🚀 Key Data: According to the survey, in the first three months after the removal of restrictions, the proportion of 'cautious' buyers in the market increased from 45% to 72%, indicating that the market is currently in an extreme confidence recovery period. :::
Part Three: Precautions and Risks—Psychological Hidden Reefs After Withdrawing from Spicy Food
Under the pleasure of “zero tax burden”, you must be wary of the following psychological traps:
1. Stock holding disaster caused by "recovery psychology"
Some owners entered the market at a high level. Although they have withdrawn, if they still hold on to the obsession of "I want to get back my capital before selling," they may miss the best opportunity to stop losses.
2. “Excessive expectations” for mainland buyers
Don't expect Hong Kong property prices to double as soon as the "mainland faucet" is turned on. Current mainland buyers are extremely picky. If your unit is in a mediocre location and has an old design, they won’t give it a second look even if it comes with zero stamp duty.
3. “Interest rate psychology” outweighs “policy dividends”
The little stamp duty saved by withdrawing the hot stamps may not be enough to offset the additional payment costs caused by two years of interest rate hikes. Buyers calculate this in their minds. If the payment expenses are still increasing, the policy bonus is just a short-acting painkiller.
:::warning ⚠️ Pitfall Avoidance Guide: Be especially careful with property listings where the owners 'raise the price' after reducing it. In the current overall environment, raising the price is a typical 'psychological misjudgment.' These owners usually have questionable holding capacity and will most likely face a larger subsequent price drop. :::
Conclusion: Confidence is more important than gold, determination is more important than policy
In summary, the withdrawal of hot property is a sign that the Hong Kong property market has returned to the "free market". But the price of freedom is volatility and uncertainty.
For smart investors, the most important thing to do after withdrawing from the market is not to buy goods like crazy, but to establish a strong psychological concentration. When market sentiment shifts from anxiety to rationality and when market sources are digested to a reasonable level, real opportunities will emerge. In the view of this "old expert", policies can only change the transaction threshold, and only the return of confidence can change the trend of value. In the changing situation, preserve cash flow and see through psychological warfare.
Call to Action
After the government "withdraws spicy food", do you feel the pressure is released and are ready to enter the market, or do you feel that the market signals are more ambiguous?
If you need a "Latest Tax Rate Comparison Table after All Roads Are Withdrawn", or want to know what extreme bargains are thrown out by "psychologically broken owners" in the current market, welcome to contact WeProperty's professional buyer team. We will clear up the fog for you and find the right time to enter the market in the game!
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