Zhongyuan Chen Yongjie: Policy Address and Interest Rate Cut Double Positive, Expected Hong Kong Property Prices and Rents to Rise by 5% for the Whole Year.

The latest interest rate meeting announced by the Federal Reserve reduced interest rates by 0.25%, bringing the federal funds rate to between 4% and 4.25%. Victor Chan Wing-kee, Vice Chairman of the Asia-Pacific region and President of the Residential Department of China Real Estate, stated that in recent months, the transaction volume of first and second-hand properties in Hong Kong has gradually picked up. With the policy address and the news of interest rate reduction, it is expected that the transaction volume of first and second-hand properties in the fourth quarter will increase by 30% per quarter, and the forecast for property prices and rents for the whole year will increase by 5%. Following the announcement of interest rate cuts by the Federal Reserve, major banks in Hong Kong reduced mortgage rates by 0.125%, with the best rates now lowered to 3.375%. In addition, officials predict that the remaining two interest rate meetings this year will further reduce rates by 0.5%. Chan Wing-kee stated that the policy address yesterday included measures favorable to the property market, and today's interest rate cut has brought a double stimulus to the property market. The transaction volume of properties in the fourth quarter is expected to increase by 30% per quarter. In recent months, Hong Kong properties have benefited from the strong performance of Hong Kong stocks, resulting in a noticeable increase in transactions. The number of first-hand transactions has exceeded 2,000 for two consecutive months, and the number of second-hand transactions facilitated by China Real Estate in September increased by 25% compared to the same period last month. The relaxation of new capital investment plans, increased non-local student quotas, and accelerated land supply in the policy address yesterday will have long-term benefits for the property market. The interest rate cut by the Federal Reserve has an immediate impact on the Hong Kong property market, reducing the immediate cost of supplying buildings for owners. Chan Wing-kee pointed out that the interest rate cut reduces the cost of corporate financing, which is helpful for economic recovery. In addition to triggering tenants to switch from renting to buying, the interest rate cut also significantly reduces the attractiveness of time deposits, which is expected to attract funds to flow into the property market, increasing cases of buying properties for rent.