Business
Hong Kong’s Property Market on Path to Recovery: Rate Cuts Boost Demand and Attract Homebuyers Amid 25% Price Slump
Analysts predict a gradual recovery of Hong Kong's real estate market, boosted by rate reductions that improve the mood and demand. The initial decrease in rates is expected to attract more prospective buyers to property exhibitions, with prices now more attractive following a 25% drop from their highest point.
Martin Wong, the senior director and head of research at Knight Frank Greater China, stated that the market continues to lack adequate buying power due to the progressive rise in mortgage rates over recent years. He anticipates that this will keep property prices on a tight leash in the immediate future, particularly in the used property sector. He also expects prime rates to decrease, but at a more gradual pace.
The one-month Hong Kong interbank offered rate, also known as Hibor and used as a standard for mortgage loans, dropped to its lowest point in 16 months at 3.614% on Thursday, following the HKMA policy action. The rate had previously escalated to a peak of 5.659% in November of the previous year, up from 3.141% in March 2022 when the Federal Reserve initiated its restrictive measures.
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