JPMorgan has indicated that the Hong Kong government could raise stamp duty on luxury residential properties in the upcoming Policy Address, though it expects any such move to have a manageable effect on the market.

The financial giant noted that while raising the tax on high-end homes is not its baseline scenario, it cannot entirely rule out the possibility. Even if implemented, the bank believes the repercussions would likely remain contained.

JPMorgan also stated it does not anticipate any substantial support measures for the private housing market in the city’s first five-year development plan. Instead, the Policy Address is expected to prioritize accelerating development in the northern areas and attracting talent, initiatives that could help underpin housing demand.

In the near term, however, share prices of Hong Kong property developers are likely to be driven primarily by the interest rate outlook.