China Real Estate: Interest rate cuts only cause a slight increase in Hong Kong property prices, stabilizing property prices requires market rescue efforts.

The Hong Kong Rating and Valuation Department (RVD) has just released the latest property price index, with the November reading at 290.9 points, a monthly increase of about 0.07%. Although prices have risen for two consecutive months, they are still at an 8-year low, with a cumulative drop of nearly 6.6% in the first 11 months of this year. The rental index, on the other hand, has declined for two consecutive months. Yan Kin-kei, Vice Chairman and President of the Residential Department of Asia Pacific of Centaline Property, believes that the effect of interest rate cuts only slightly lifts property prices, and market rescue measures are needed to stabilize prices. Yan pointed out that the United States has cut interest rates three times in a row, and Hong Kong has followed suit, with the most favorable rate reduced by 0.625%. With the interest rate cuts, spicy measures from the government, and relaxed mortgage policies, second-hand transactions have stabilized slightly, leading to two consecutive months of increase in the RVD index. However, despite the three favorable factors supporting the property market, prices have only recorded a slight increase, and transaction volume has not shown significant improvement. He predicts that due to the holiday season, the number of new properties sold in December is expected to be less than 800, reaching a new low in 4 months. Next year, the Hong Kong property market will be affected by three major factors: interest rates, economy, and policy. The United States is expected to cut interest rates twice again next year, and the economy and policies are believed to depend on the stance of both the US and China, with existing instability. Facing severe financial deficits, the government is believed to find ways to save the economy and the property market in order to stabilize property prices and prevent a collapse that could affect the overall economy. As interest rates continue to fall, the oversupply compared to demand for rentals will become more apparent. If the government introduces measures to stabilize the property market and the economy, Yan predicts a 10% increase in property prices next year. Regarding rentals, the private rental index has declined for two consecutive months, with the latest reading at 193.1, a monthly drop of 0.4%. Yan Kin-kei explained that the peak season for student rentals during summer vacation has passed, and with the approaching New Year and Christmas, which are traditionally slow periods, rental transactions have decreased, leading to a slight adjustment in rental prices. However, the government's efforts to attract talent policy remains unchanged, providing support to the rental market, and it is expected that next year's rental price increase will be similar to this year, with a 5% increase.