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Fed’s Interest Rate Cuts Fail to Stimulate Hong Kong’s Secondary Property Market: A Detailed Analysis
Reductions in interest rates do not boost activity in Hong Kong's secondary real estate market.
The recent series of interest rate decreases, instigated by the Federal Reserve, did not manage to stimulate Hong Kong's secondary real estate market during the weekend.
Just seven transactions were completed during the weekend, marking a drop of 53.3 per cent compared to the previous week and hitting an eight-week low, as per Centaline Property's data. Three deals took place in South Horizons, Aberdeen, one was in Metro City, Po Lam, another in Whampoa Garden, and the last one in Caribbean Coast, Tung Chung.
The intended outcomes have not been achieved with the reduction of rates, and the city hasn't seen a revival similar to the one it witnessed post the removal of property cooling measures in the later part of February, says Louis Chan Wing-kit, the Chief Executive Officer of the residential division of Centaline Property Agency, a real estate company.
"The sluggish reaction of buyers and investors from the mainland is primarily to blame, as they continue to adopt a cautious stance and have not started participating in the market yet," he explained. "At present, the market's stability is primarily due to local buyers, and as a result, there hasn't been a swift enhancement."
While the secondary market saw a decrease in transactions after the initial reduction in lending rates in almost five years, there was an increase in the number of individuals scheduling viewings for apartments. Over the weekend, there were 1,130 viewing appointments set across 50 properties in Hong Kong, a 7.6% increase from the previous week. This marked a record high for the past 21 weekends, according to information released by Ricacorp Properties on Friday. They also noted that the number of viewing appointments have been steadily increasing for the past nine weeks.
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