Analysts divided on whether Hong Kong will follow interest-rate moves in Britain and Australia
Speculation has heightened that Hong Kong homeowners are preparing themselves for higher mortgage payments next year as the global interest-rate cycle shows signs of turning.
With Australia and Britain lifting interest rates by 0.25 of a percentage point last week, economists and property experts believe the United States may make similar moves, ending the wave of interest cuts in developed countries.
While the move on rate increases began fuelling fears for over-geared homeowners in Britain, Australia and the US, Hong Kong's prospective buyers and flat-owners are starting to worry about similar rises and their consequences on a revival in the property market.
'Following last week's rate rises in Australia and Britain, the US may raise its rate a bit earlier, probably in the next seven months,' said Koh Keng-shing, managing director of Landscope Realty. Some global economists are beginning to speculate the US Federal Reserve will lift its cash rate as early as March.
Hong Kong, whose interest rates are determined by those in the US because of the fixed exchange rate between the Hong Kong dollar and US dollar, is likely to follow suit, according to Mr Koh. An increase in rates will mean a heavier loan commitment for home owners.
