Signs of a rebound in the Hong Kong property market are emerging, with Executive Director Zhao Guoxiong estimating that property prices will gradually rise

According to the Hong Kong Economic Times, with the decline in local bank interest rates in Hong Kong and the introduction of market rescue measures by the central government, the Hong Kong stock market has performed well recently, and the property market atmosphere has also significantly warmed up. CK ASSET (stock code: 01113) Executive Director, Zhao Guoxiong, stated in an interview that the Hong Kong property market is currently showing a "U-shaped" development trend, asserting that property prices have bottomed out. He expects a 2% to 3% rebound in property prices in the fourth quarter of this year, with the upward trend likely to continue into next year, and the increase may further expand.

In the interview, Zhao Guoxiong reviewed the different impacts of the 2008 financial crisis and the current COVID-19 pandemic on the Hong Kong property market. He pointed out that the impact of the financial crisis was relatively short, lasting only a few months, allowing the Hong Kong property market to quickly recover. However, the COVID-19 pandemic has lasted for over 3 years since 2020. Despite Hong Kong's relatively ample fiscal reserves, it will still take a long time to recover. Based on this assessment, he believes that the Hong Kong property market is entering a "U-shaped" recovery phase.

Zhao Guoxiong further analyzed that with the Federal Reserve's half-point rate cut last month, local banks in Hong Kong have also lowered interest rates accordingly. It is widely expected that if the United States continues to cut interest rates in the future, Hong Kong will follow suit. This rate cut trend will drive down financial costs, thereby boosting the overall property market atmosphere. In addition, the mainland government is implementing a relatively loose monetary policy to support the continuous development of the national economy and has introduced multiple measures to support the mainland real estate market. These favorable factors are working together, leading to signs of a bottoming out rebound in the Hong Kong property market.

According to data from the Hong Kong Rating and Valuation Department, the overall private residential property price index fell by 6.17% in the first 8 months of this year. Compared to the historical high in September 2021, property prices have fallen by approximately 26.63% over about three years. Zhao Guoxiong pointed out that although several thousand units of new properties have been absorbed in the past few months, inventory levels remain high, making it difficult for property prices to rise significantly in the short term. He predicts a 2% to 3% rebound in property prices in the fourth quarter of this year. For the full year of 2024, overall property prices may still experience a slight decline.

Looking ahead to 2025, Zhao Guoxiong stated that with the gradual reduction of new property inventory and some real estate developers slowing down the pace of large-scale new projects, coupled with the government's less proactive land sales attitude in the past two years, the future supply of the property market is expected to decrease. This will help the supply and demand of the property market reach a balance more quickly, thereby driving more significant price increases in the property market. He predicts that the price increase next year will exceed that of the fourth quarter of this year. However, the specific performance of property prices will depend on whether there will be any changes in financial and economic policies after the U.S. presidential election.

In terms of sales, CK ASSET's main new project this year is Blue Coast in Phase 3B on the south coast of Hong Kong Island near Wong Chuk Hang Station. The project went on sale in early April this year and achieved sales of over HKD 10 billion in just 8 days. Zhao Guoxiong estimated that along with other remaining projects, CK ASSET has cashed out approximately HKD 13 billion in the first three quarters of this year. He revealed that Blue Coast II in Phase 3C on the south coast of Hong Kong Island will be launched this quarter, and the first phase of 307 residential units at 16 Cheung Fung Road, East Kowloon, is currently applying for pre-sale The presale progress will determine whether the property can be listed this year. As for projects expected to be launched next year, they include the Hong Kong people's first home ownership pilot project near Andes Avenue in Kwun Tong and residential projects on Kam Tai Road in Kam Tin, Yuen Long.

In terms of the land market, CK ASSET has been actively participating in bidding. In the tender deadline of the Urban Renewal Authority's Kowloon City Kai Tak Road / Sha Po Road project last month on the 20th, CK ASSET was the only developer to submit a tender. Victor Cha, the spokesperson, stated that CK ASSET takes every piece of land seriously and strives to participate in bidding. He believes that the Kai Tak Road project has development potential as it can be connected to the Kowloon East Kai Tak area through a tunnel, hence the decision to bid for it.

Addressing the view of some market participants that CK ASSET's bids are relatively conservative, Victor Cha emphasized, "In business, we all hope to make a little profit." He stated that CK ASSET's principle is to be steady in development and develop steadily. As the group does not bid aggressively for land at high prices, even in the face of market fluctuations, it may not guarantee profits, but losses will not be too significant. He is optimistic about the long-term economic development of Hong Kong and believes that as long as the real estate market is not overly aggressive, there is still room for development