Both Hong Kong and the US cut interest rates by 0.25%. Centaline Property: Hong Kong property prices are expected to rise by 3% to 5% in the fourth quarter
On November 7th, the Federal Reserve cut interest rates by 0.25%, and BOC Hong Kong and HSBC also followed suit, adjusting Hong Kong's best lending rate to 5.375%. Chan Wing Kit, Vice Chairman of Centaline Property, expects that due to the central government's market rescue and interest rate cuts, Hong Kong property prices are likely to rebound by 3% to 5% in the fourth quarter. The transaction volume for new homes in October increased threefold compared to September, and the secondary market also saw significant growth, indicating that the interest rate cut and favorable policies have activated the market. There are clear signs of a halt in the decline of property prices, and the market outlook is optimistic
According to the Zhitong Finance APP, on November 7 local time, the Federal Reserve cut interest rates by 0.25% as expected by the market. BOC Hong Kong and HSBC also announced a reduction of 25 basis points, adjusting the Hong Kong dollar prime rate from an annual rate of 5.625% to 5.375%. Chen Yongjie, Vice Chairman of the Asia-Pacific Region and CEO of the Residential Department of Centaline Property, stated that in the past two months, the central government has vigorously stimulated the market, leading to a sharp increase in transactions in the mainland real estate market, which has also benefited the Hong Kong property market. With Hong Kong removing all property market cooling measures and welcoming all foreign capital to invest in the Hong Kong property market, along with the boost from this synchronized interest rate cut between Hong Kong and the U.S., it will add momentum to the Hong Kong property market, and it is expected that Hong Kong property prices may stop falling and rise by 3% to 5% in the fourth quarter.
Chen Yongjie mentioned that the last round of interest rate cuts in the U.S., combined with the central government's series of measures and the relaxation of mortgage policies in Hong Kong's policy address, resulted in a stable price with increased transaction volume in the Hong Kong property market in October. HSBC has just announced a reduction of the prime rate by 0.25%, following the U.S. cut, bringing further surprises to the market. He believes that this synchronized interest rate cut between Hong Kong and the U.S. could provide a new round of stimulus for the Hong Kong property market.
In October, the transaction volume of new properties was nearly 3,000, a threefold increase compared to September. In the secondary market, the number of transactions facilitated by Centaline Property increased by 85% compared to September, proving that the interest rate cut, along with favorable property market policies, successfully activated the transaction volume in the property market.
As for property prices, there are also signs of stopping the decline. In October, the Centaline City Leading Index (CCL) recorded three increases and one decrease, and last week's index showed only a slight decline of 0.2% compared to before the U.S. interest rate cut. Chen Yongjie pointed out that property prices typically rise more slowly than transaction volumes, and a halt in the decline of property prices with a gradual increase will allow for healthier development of the property market.