Goldman Sachs: Hong Kong Policy Address's property market stimulus measures are limited, maintains view of an upward cycle in the property market.

Goldman Sachs released a research report stating that Hong Kong's new Policy Address and first Five-Year Plan contain fairly limited new policies targeting the property market and related sectors, with no major stimulus measures as expected by the market; the bank maintains its view that Hong Kong's property market will enter an upward cycle for at least the next three to four years due to supply-demand imbalance, and remains more bullish on developers with more saleable resources and/or solid balance sheets, including SHK PPT (00016), HENDERSON LAND (00012), and SINO LAND (00083), each rated "Buy". The bank noted that the overall policy direction of the new Policy Address and first Five-Year Plan includes enhancing long-term competitiveness through the "four centres and one hub" initiative, deepening Greater Bay Area integration, accelerating Northern Metropolis development, and improving livelihoods under "one country, two systems." On the demand side, measures mainly focus on families with newborns, including extending the HK$20,000 newborn baby bonus scheme for three years, increasing the bonus for second or subsequent children to HK$30,000, offering a stamp duty rebate of up to HK$20,000 on newly purchased residential properties for eligible families, raising the child allowance, and increasing the mortgage cap for White Form newborn families purchasing Home Ownership Scheme flats from 90% to 95%. On the supply side, the government reiterated that approximately 2,500 hectares of "spade-ready" land will be prepared over the next decade, of which 1,400 hectares will be delivered in the next five years (including 900 hectares in the Northern Metropolis), and that 420,000 new units will be planned over the next decade at a 70% public and 30% private ratio; including Light Public Housing, total public housing production over the next five years will reach 196,000 units. The Northern Metropolis will launch all nine new development areas, providing over 70,000 residential units and 1 million square metres of economic floor area in the next five years, and will advance multiple railway and road infrastructure projects; MTR CORPORATION (00066) is expected to continue accelerating tenders for future sites. The bank said investors' expectations for major property stimulus were already low beforehand, and property and rental stocks reacted mildly on the day, roughly flat to up 1% to 2%. The bank noted that recent share price performance remains dominated by interest rate trends, buyer sentiment regarding policy uncertainty, and other macro factors.