Overseas Chinese Bank: Expects Hong Kong property prices to fall by 0 to 3% this year, but there is a chance they may bottom out.

Overseas Chinese Bank announced the economic outlook for 2025. The bank's Hong Kong economist, Jiang Jing, stated that the bank expects the Hong Kong dollar interest rates to gradually decrease in the coming quarters. The Hong Kong dollar interest rates may lag behind the US dollar interest rates in the downward trend, with the 3-month Hong Kong Interbank Offered Rates (HIBORs) expected to fall to the range of 3.60-3.80% by mid-2025. It is anticipated that the best lending rates in Hong Kong for the first quarter of this year will be reduced by 25 basis points. Regarding the rate cuts in the United States, she mentioned that the bank's basic forecast is for the federal funds rate to be reduced by 25 basis points in each of the first, second, and third quarters of 2025, with a total reduction of 75 basis points by the end of the year to reach 3.5-3.75%. However, it is possible that the rate cuts may be paused this month. As for the Hong Kong property market, she pointed out that with the high interest rate environment, weak economic recovery, and increasing housing supply, the residential property market remained stable in 2024. It is expected that prices this year will decrease by 0 to 3%, with a chance of hitting bottom in the first quarter and then stabilizing.