Hong Kong Property Sales Expected to Rebound Following Interest Rate Cuts

Interest Rate Impact on Hong Kong Property Sales

Property sales in Hong Kong have seen a significant decline, with total sales at a seven-month low in September. This decline—down 18.7% to 3,843 units—highlights the cautious sentiment among homebuyers and investors as they await a policy easing cycle. However, with the recent interest rate cuts from the US Federal Reserve and the Hong Kong Monetary Authority (HKMA), the market is expected to witness a resurgence.

Analyst Insights on Market Recovery

Eddie Kwok, executive director for valuation and advisory services at CBRE Hong Kong, states that major developers are poised to launch projects aimed at capturing pent-up demand following the rate cuts. This strategic move is anticipated to enhance primary sales transactions in the coming months as developers prioritize competitive pricing.

• Sales of new homes dropped by 22% in September.
• Total sales value decreased to HK$27.7 billion.
• Analysts forecast sales to exceed 5,000 transactions in October.

Future Outlook for Homebuyers

The adjustments in mortgage rates are also projected to have beneficial effects on both secondary market transactions and new project launches. For instance, on a HK$5 million loan, a rate cut translates to an HK$720 reduction in monthly payments, making home ownership more accessible. As Derek Chan from Ricacorp Properties mentions, the dual support from interest rate cuts and measures from Beijing are pivotal in setting the stage for a significant increase in property transactions in October.

Promising Sales Trends Among Major Developers

Recently Emperor International and Sun Hung Kai Properties reported strong sales, with Emperor selling all 85 units available at their development. The momentum suggests a positive shift in buyer confidence and market activity following historically low pricing on new developments.