“The initiative announced on Wednesday lowers the stamp duty on first home purchases and because of this market sentiment is expected to improve,” said Mandy Lam, a branch manager at Centaline. “We are seeing buying and selling decisions in the market speeding up.”

Meanwhile, the Long Garden estate in Yuen Long also recorded its first transaction this month after a 425-square feet property with two bedrooms was sold for HK$5.5 million, giving the previous owner a gain of HK$4.01 million on their original purchase price, said Centaline.

The Yuen Long district recorded six property transactions for used homes on Wednesday, after the announcement of the measure, according to Centaline. Inquiries for lived-in homes and appointments for property viewings have increased by as much as 30 per cent, while homeowners are becoming reluctant to extend more concessions to potential buyers, said the agency.

Given Hong Kong’s full reopening after the pandemic, along with the reopening of the border with mainland China, Cushman has adjusted its forecast for home prices in the city this year to an increase of between 5 and 10 per cent, from 3 to 5 per cent previously, said Tang.

Following Chan’s announcement, ad valorem stamp duty will be HK$100 (US$12.8) for homes worth up to HK$3 million, instead of HK$100 for homes worth up to HK$2 million previously. The tax changes – which are on a sliding scale – apply to homes worth HK$10 million or below, and the saving would be up to HK$67,500 for properties worth HK$9 million, according to calculations by StarPro Agency.

The adjustment comes after the city’s home prices fell 15.6 per cent in 2022, the biggest drop in 24 years. The number of residential property transactions plunged by almost 40 per cent to a low of about 45,000 deals. The tax cut is expected to benefit about 37,000 homebuyers annually, according to Chan’s speech.

In Koko Rosso, flats on offer are as small as 300 sq ft, with the cheapest unit priced at HK$6.3 million.

Meanwhile, Bal Residence of Lai Sun Development and the Urban Renewal Authority, has announced the pricing of 56 units on offer in the coming week. Units to be offered will have a maximum discount of 11.75 per cent, with the cheapest flat priced at HK$5.8 million.

“The new stamp duty reduction for flats below HK$10 million can help both first hand and secondary markets but as new homebuyers and young families prefer first hand flats, the first hand market will see more benefit,” said Hannah Jeong, head of valuation and advisory services at Colliers Hong Kong.

However, the property consultancy believes that despite the new measure, home prices in the city are still likely to decline by 3 per cent this year.

“A number of buyers appear more eager to purchase a property after the announcement, but even for a HK$9 million property, a potential buyer only saves around HK$60,000, so it’s not significant enough in my view,” said Buggle Lau, chief analyst at Midland Realty. “It’s just been a day after the announcement, the market will need time to digest.”

“The impact is near zero to the overall market,” said Nelson Wong, executive director of research at JLL in Hong Kong. “Also, traditional economic analysis of tax incidence tells us that a reduction in tax will benefit both buyers – in the form of lower tax liability – and sellers – in the form of higher prices.”