Hong Kong Property Market Sees Potential Revival with Lower Borrowing Costs

Market Sentiment Shifts with Rate Cuts

The Hong Kong property market is set to experience a rebound following mortgage rate cuts from prominent banks, including HSBC and Standard Chartered. This development comes after the Hong Kong Monetary Authority (HKMA) reduced its base rate in response to US Federal Reserve policy adjustments. Experts like Martin Wong from Knight Frank note that while purchasing power is still strained, many buyers are eager to enter the revised market.

Impact of Reduced Prime Rates

With prime rates falling, borrowers can expect significant savings on their monthly payments. HSBC has notably lowered its prime rate to 5.625%, a beneficial shift for those looking to purchase property. The recent sales figures, such as the transaction of a two-bedroom flat in Mei Foo at a discount, illustrate the evolving landscape of the market.

Long-Term Outlook for Home Prices

Experts predict that while immediate price declines are likely, conditions for a major recovery are not yet in place. Analysts from UBS forecast a modest decline in prices over the next year, stabilizing by the end of 2024. The influx of new residential properties may continue to affect price recovery, suggesting a cautious optimism for buyers. As the sentiment in the market strengthens, developers are planning to accelerate new projects to meet the growing demand.