Zhongyuan: Hong Kong property market continues to heat up, expected to increase by 5% throughout the year.

According to the data from the Hong Kong Rating and Valuation Department, the private residential property price index in Hong Kong in October this year was 294.3 points, up 0.4% month-on-month, marking a 5th consecutive increase. Victor Tin, Vice Chairman and President of the Residential Department of Asia Pacific at Centaline Property, stated that the rating and valuation department's property price index is a lagging indicator. The latest index reflects a continuous warming of the property market and rising prices. The data does not yet reflect the positive impact of the second interest rate cut and the important consensus reached at the meeting between the leaders of China and the United States, which are expected to further support property prices. The actual impact will be reflected in next month's property price index. The Centaline City Leading Index (CCL) released weekly rose by 0.54% last Friday, surpassing 142 points, reaching a 73-week high at the end of June 2024. The latest CCL reflects the market conditions of the week when the US and Hong Kong banks announced further interest rate cuts in October, as well as the meeting between China and the US. The CCL has risen by 3.52% this year, indicating that property prices have hit bottom and entered an upward phase. The expected full-year increase for the CCL is 5%, which is a reasonable increase. Victor Tin stated that buyer confidence has increased significantly after two rounds of interest rate cuts, leading to a further warming of the property market, with both the primary and secondary markets thriving. Developers are actively promoting sales, with the primary market being particularly lively. The positive atmosphere has also spread to the secondary market. Recently, developers have started to reduce incentives, and there has been an increase in prices, which the market has responded well to. The primary market has recorded approximately 1,600 transactions this month. The supply of new properties this month is not high, and most transactions are from remaining inventory, resulting in an ideal stock clearance situation. It is expected that the total number of primary market transactions this year will exceed 20,000, setting a new high in 6 years. With the improving performance of the property market and rising optimism, combined with the potential further interest rate cut by the Federal Reserve in December, supported by multiple positive factors, property prices are expected to continue to rise, with a projected increase of 5% for the whole year. The property market is currently in the early stages of recovery, with a gentle upward trend. However, the current property prices are still about 26% lower than the previous peak, and it will take time to recover the lost ground in the past three years. More positive news will be needed to drive this recovery. As for the rental index, rental performance remained stable this month, but it has risen by 4% so far this year, with a significantly faster rate of increase than property prices. The high demand for local housing, coupled with continuing influx of talent to Hong Kong, has led to sustained supply shortages in the rental market. It is believed that rental prices will not decrease and the upward trend will continue.