Goldman Sachs: Hong Kong residential transactions soften, but property prices remain resilient; maintains full-year property price growth forecast of 15%.

Goldman Sachs released a research report stating that Hong Kong residential transaction volume has continued to soften over the past two to three months, but property prices remain resilient, with a cumulative gain of about 12.5% year-to-date. The bank maintains its forecast of a 15% increase in property prices for the full year. The bank noted that Hong Kong residential transaction volume shifted from a 42% year-on-year increase in the first half to a 26% year-on-year decline in July and August, and has stabilized at a lower level. The recovery in the office market has begun to extend to non-core districts, including Admiralty and Island East; retail rents have stabilized since June, but are still down 1.5% year-to-date, lagging behind the bank's full-year forecast of a 3% increase. The market is concerned about the impact of rising U.S. interest rates on Hong Kong's property market. Goldman Sachs believes that liquidity in the Hong Kong market remains ample, with bank deposit balances growing about 10% year-on-year, and expects the pace of property price gains to slow for the full year. Goldman Sachs' stock picks in the property, landlord, banking and financial sectors include HENDERSON LAND(00012), SHK PPT(00016), SWIREPROPERTIES(01972), HSBC HOLDINGS(00005), STANCHART(02888), HKEX(00388), and holds a positive view on BOC HONG KONG(02388) and others.