Zhongyuan Real Estate: CVI ends 5 consecutive declines and stabilizes above the 70-point level, expected to continue to be optimistic in the first quarter of next year.

Yang Mingyi, senior joint director of the research department of Midland Realty, pointed out that the latest CVI this week is 76.05 points, an increase of 1.75 points from 74.30 points last week. Large banks in Hong Kong have extended their fixed-rate mortgage plans until the end of April next year, ending a five-week decline in CVI and stabilizing above the 70-point level, indicating that banks' mortgage attitudes remain optimistic and positive. The index has been in the bullish area of above 60 points for 12 consecutive weeks, indicating that Hong Kong property prices will continue to improve. With the current most favorable interest rates at historic lows, it is expected that the United States will continue to cut interest rates, and Hong Kong's interest rates are expected to decline, thereby expanding the space for mortgage rate cuts. Positive factors include the traditional Chinese New Year peak season, and it is expected that CVI will continue to stabilize in the bullish area in the first quarter of next year. After the complete relaxation of the harsh measures by the Hong Kong government at the end of February 2024, property transaction volumes rebounded, CVI rebounded from a low point, and CCL stabilized from a low of 143.02 points. CVI rose for nine consecutive weeks from 14.49 points, reaching as high as 73.73 points, and stayed above 60 points for six consecutive weeks, while CCL broke away from the low and hovered narrowly between 144 and 148 points. However, CVI later fell into the range between 40 and 60 points, with the upward momentum of property prices being hindered and facing the risk of a decline. In early June, CVI further fell below 40 points, staying in a bearish zone for nearly 20 weeks, reflecting that the property market has entered an adjustment phase. At the same time, property prices continued to decline, erasing all gains made after the relaxation of harsh measures. With the start of a rate reduction cycle in September and the policy address in October, CVI steadily rose, breaking through the important thresholds of 40 and 50 points, while property prices repeatedly stabilized. Entering 2025, with the inauguration of US President Trump in January and the escalating trade war, as well as the Federal Reserve slowing down its rate cuts, the global economic and political environment faces new challenges. At the end of January, before the end of CVI, it repeatedly hovered around the threshold of 50 points for 13 weeks, and in February, it sharply dropped to around 40 points, at the lower limit of the bearish zone, while property prices failed to further break through, and CCL continued to fluctuate between 136 and 137 points. With the escalation of the trade war in early April, CVI fell back below 40 points into the bearish zone, fluctuating below 40 points for 5 weeks, and property prices also continued to narrowly decline. In early May, interest rates fell sharply and remained low, with CVI rising for 8 consecutive weeks. From the end of July to mid-September, it stabilized above 60 points for 8 consecutive weeks, while property prices remained stable with a slight increase. After the resumption of rate cuts in September, CVI rose for seven consecutive weeks, stabilizing above the 80-point level, and property prices continued to rise steadily. The latest CCL is reported at 145.01 points, a 7.29% increase from the low of 135.16 points in May when the H interest rate was below the ceiling interest rate. After the relaxation of stamp duty in Hong Kong, it increased by 7.50%, and compared to the low of 135.86 points before the rate reduction cycle, it increased by 6.73%. The property prices in 2025 have temporarily increased by 5.35%.