Hong Kong real estate agents said on Thursday they are cautiously optimistic about the property market this year following strong sales during the Chinese New Year period, and hope the upcoming 2025-26 Budget will include more measures to provide further support to the sector.
From Jan 29 to Feb 11, or the first 14 days of the Chinese New Year, there were about 241 transactions recorded, an increase of 1.8 times from the same period last year and the second-highest total since 2018, according to a Hong Kong government platform that tracks sales of firsthand residential properties.
The recovering primary property market indicates that developers have regained their momentum, said Dave Ma, CEO of Hong Kong Property Services Ltd.
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Despite the uncertainty in the global economy this year, which may pose challenges for the property market, the ongoing interest rate cuts and the improvement in Hong Kong’s economic outlook are expected to boost the city’s housing sales, Ma added.
Peter Wong, the agency’s director of research, said he expects the US Federal Reserve to reduce interest rates twice this year, and banks in Hong Kong to follow suit. If the cuts are larger than market expectations, mortgage payments could be more cost-effective than rental payments, Wong said, adding that this will help the recovery in property sales.
Wong said he predicts housing prices for the year to rise by more than 10 percent from 2024, if the 2025-26 Budget to be released on Feb 26 includes new supportive policies. He expects firsthand property transactions to reach 18,000, a 15 percent increase year-on-year, while secondhand transactions could rise by about 2 percent to 42,000.
Ma encouraged the government to further lower the threshold of its investment migration program. Effective from Oct 16 last year, the New Capital Investment Entrant Scheme allows investment in residential property valued at HK$50 million ($6.42 million) or above as part of its minimum investment requirement. Before that, only non-residential properties and financial assets like equities and debts were included.
He said this could help enhance the appeal of housing in Hong Kong, especially for buyers from the Chinese mainland. Ma added he believes mainland customers have a positive outlook on the city’s property market; in the past 11 month since Hong Kong scrapped all its home purchasing curbs, mainland consumers have bought 5,647 firsthand houses in the city, an increase of nearly 200 percent compared with the previous 11-month period.
The government should introduce further measures to attract professionals and high-net-worth people to Hong Kong, in a bid to create new demand in the property market, Ma said.
A report released by real estate services provider Cushman & Wakefield in December expressed similar views, stating that it expects the ongoing interest-rate-cut cycle and the influx of expats and non-local students to add to the housing-market demand in 2025.
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The company projects the transaction volume to increase by 5 to 8 percent, while prices could pick up by 5 percent.
To ease the financial burden on buyers, HSBC — one of Hong Kong’s three note-issuing banks — launched new mortgage options on Wednesday, offering a fixed rate of 3.18 percent for the first three years, or 3.03 percent for the first five years. In the following years, the rate will be set according to the prime interest rate minus 1.75 percent.
Ivy Wong Mei-fung, managing director at Centaline Mortgage Broker, said this move reflects banks’ positive sentiment regarding the real estate sector in Hong Kong this year.
Contact the writer at irisli@chinadailyhk.com
