The goal of Wednesday’s annual policy statement will be to stabilize an economy that has suffered from widespread emigration from the city and economic hardships on the mainland. It is anticipated that Hong Kong will announce a reduction in stamp taxes for some property transactions.

John Lee, the Chief Executive of Hong Kong, made these comments a day before he was scheduled to announce policy ideas to the legislature. He stated that the emphasis will be placed on boosting the economy and enhancing people’s standard of living.

According to the local media, Lee is anticipated to reduce stamp duties on some property sales but not all property transactions. The property market is a crucial pillar of the economy.

In one of the world’s most expensive markets, business community members and homeowners are petitioning the government to reverse a set of cooling measures that have been in place for the past ten years. These policies were designed to rein in speculative activity.

In the decade leading up to 2019, anti-government mass rallies rocked Hong Kong, the COVID epidemic, and a subsequent brain drain of hundreds of thousands of individuals in response to a national security crackdown. Despite this, home values increased by approximately 300% during this period.

Since then, housing values have decreased by 13% in response to higher interest rates and a pessimistic economic outlook. Prices for residential real estate reached a seven-month low in August, and real estate professionals anticipate that they will finish 2023 at least 5% lower.

The number of residential mortgage loans in situations of negative equity is likely to grow beyond 10,000 in September, which is getting close to an 18-year high established in the fourth quarter of last year. Transaction volumes have decreased in both the luxury and wider sectors, which reflects the dismal attitude in those markets.

“Even if the government reviews and relaxes certain stamp duty measures in the future, although this may bring stability and restore some confidence among potential buyers during the downward cycle, we believe that property prices will continue to fluctuate for a while,” said Rosanna Tang, Hong Kong head of research at Cushman & Wakefield, a property consultancy. “Even if the government reviews and relaxes certain stamp duty measures in the future, although this may bring stability and restore some confidence among potential buyers during the downward cycle,”

It is anticipated that the economy of Hong Kong will expand by 4% this year, following a contraction of 3.5% in 2022. The previous year, Lee revealed several plans to entice leading foreign talent to relocate to the city. These plans have met with some degree of success. However, the majority of applications have come from the Chinese mainland.

Like the situation in mainland China, Hong Kong is dealing with a declining birthrate, which presents a demographic issue. According to reports in the local media, Lee may provide a monetary incentive for infants delivered to a single resident parent.

It is anticipated that Lee, whom the United States government blocked for his role in suppressing civil liberties, would also underline the significance of keeping a firm grip on national security, which is a top concern for the Chinese leader Xi Jinping. It is anticipated that further security legislation, such as anti-espionage measures, will be implemented shortly in Hong Kong. This is the case despite the city’s efforts to improve its standing in the international community and attract more money.

Several countries in the West have voiced their disapproval of the escalating crackdown on national security, which has resulted in the detention of many democratic opposition leaders and the shutdown of liberal media sites.