A property agent pastes a poster welcoming government measures outside his store in Jordan after Financial Secretary Paul Chan Mo-po announced the scrapping of all property cooling measures in his 2024-25 Budget speech, on Feb 28, 2024. (EDMOND TANG / CHINA DAILY)

HONG KONG – The property market in Hong Kong immediately celebrated the removal of decade-long curbs with a jump in transactions, property agents said on Thursday, as authorities made a concerted bid to boost the city's depressed real estate market.

Long among the world's most expensive housing markets, Hong Kong saw prices plunge 20 percent from their 2021 peak, hurt by several factors including the COVID-19 pandemic and interest rate hikes.

READ MORE: Scrapping property curbs seen boosting HK's housing market

On Wednesday, Hong Kong removed all additional stamp duties introduced more than a decade ago to cool housing prices.

Buyer confidence has generally improved and they have speeded up their entry into the market.

Sammy Po, Residential CEO, Midland Realty

The financial hub recorded 28 transactions in the new home market on Wednesday, up from 14 the previous day and a daily average of four to five units last week, while the secondary market also saw a 50 percent increase from Tuesday.

Home sellers also turned bullish, with some raising their asking prices by 3-5 percent, according to property agents.

"We see the market is reacting positively," Sammy Po, the residential CEO of Midland Realty told Reuters.

"Buyer confidence has generally improved and they have speeded up their entry into the market."

The latest relaxations could also attract more second homebuyers, foreigners and investors, property agents said, as they no longer need to pay up to 15 percent of additional stamp duties.

In a parallel move, the city's de facto central bank on Wednesday raised the maximum amount homebuyers can borrow for most purchases to 70 percent from 50-60 percent previously, and for investors to 60 percent from 50 percent.

Shares of Midland surged as much as 44.6 percent on Wednesday, and many realtor branches put up new posters to celebrate the "historical" day. "Curbs became history; new era for the property market", one read.

The website of Centaline Property Agency, another large realtor, was temporarily down after the government announcement due to a surge in traffic.

"It's a 180-degree change. People who were not interested in the property market are now also interested," said Louis Chan, Centaline Asia Pacific vice chairman, adding homeowners were also keen to check the valuation of their home.

In this Feb 26, 2024 photo, a taxi passes by a residential estate in Shek Tong Tsui, Hong Kong. (SHAMIM ASHRAF / CHINA DAILY)

Recent purchases would focus on small to mid-sized apartments, the agents expected.

Home prices in the city rocketed 200 percent in the decade to 2021, worsening one of the world's most unaffordable markets.

Housing transaction volumes plunged 30 percent in the last two years as more residents turned to the rental market, and market participants said it is essential to see more sales for the prices to stabilize.

Midland expected volumes could surge up to 40 percent in March, while major developers New World Development forecast volumes could rise at least 40 percent to 50 percent and Henderson Land forecast 30 percent for the full year.

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Seizing on the improved sentiment, New World told an earnings conference on Thursday it planned to launch nearly 2,500 new flats in the next six months. However, it did not expect prices to see big gains as much supply has accumulated in the market.

Some agents cautioned conditions remain challenging.

"The negative factors such as high interest rates and a weak economy still exist and simply withdrawing the measures is not enough to reverse the downward trend," said Joseph Tsang, Chairman of JLL in Hong Kong.

Interest rate cuts and an economic improvement would be needed for prices to bottom out and rebound, he added.