HK Stock Market Move | Hong Kong property stocks generally fell, as concerns about potential US interest rate hikes reignited. Bank of America Securities predicts that the rise in property prices will slow down.

Hong Kong real estate stocks fell across the board. As of the time of publication, Henderson Land (00012) fell by 3.2% to 24.82 Hong Kong dollars; SHK PPT (00016) fell by 2.99% to 110.2 Hong Kong dollars; Sino Land (00083) fell by 2.45% to 10.35 Hong Kong dollars; CK Asset (01113) fell by 1.83% to 43.9 Hong Kong dollars. In terms of news, Bank of America Securities released a research report stating that concerns about potential interest rate hikes in the United States have reignited, leading to a recent adjustment in Hong Kong real estate stocks. The bank expects that the market has already priced in one to two interest rate hikes, which is not likely to lead to a decline in housing prices in Hong Kong. However, they acknowledge that a more aggressive interest rate path could bring risks. The bank expects the momentum of first-hand residential sales to slow down in the second half of this year, with housing prices showing only moderate growth (10% increase since the beginning of the year), and has adjusted their forecast for Hong Kong housing price growth from an original 5% growth to flat to 5% growth in 2027. J.P. Morgan pointed out that the Hong Kong secondary residential property price index has rebounded by 10.4% since the beginning of the year, reaching the lower limit of the bank's forecast of a 10% to 15% increase for the full year of 2026, suggesting that housing price growth in the second half of the year may slow down to below 5%. The bank maintains the above-mentioned full-year forecast and expects that although housing price growth may slow down, the upward trajectory will continue, with the biggest downside risk being the long-term weakness of the Hang Seng Index, which has historically shown a strong correlation with Hong Kong property prices (usually with a lag of 3 to 6 months). To reflect the related uncertainties, the bank has lowered the target price of Hong Kong real estate stocks by an average of 10%.