“The increase of the US Fed rate and HKMA base rate is well expected and they are not a surprise to the market. The homebuyers have well prepared to pay more for their mortgage loans in coming years,” said Louis Chan, vice-chairman and chief executive of Centaline Property Agency’s residential department in Asia-Pacific.

Hong Kong’s cost of money soared by the most in 22 years as the city’s de facto central bank followed the US Federal Reserve to increase the base lending rate by 50 basis points to 1.25 per cent. That marked the biggest one-time increase in Fed rates since 2000.

“The property sentiment has not yet changed with the interest rate rise,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division, adding that the commercial mortgage interest rate has not yet risen. Most mortgage rates are now at about 2 per cent.

“Even if the interbank rate or prime lending rate will increase later this year, it is not going to be substantial,” Po said. “People can still afford to pay their mortgage loans with the expected rate rise. The property outlook for the Hong Kong market remains positive.”

Some homebuyers are rushing to buy now in anticipation of further rate increases, according to Vincent Cheung, managing director of Vincorn Consulting and Appraisal. “They fear they may not be able to pass the stress test requirement next year and hence will not be able to get a mortgage loan,” he said.

Hong Kong’s stress test requires all new mortgage borrowers to prove their income is high enough to withstand interest rate increases of up to 3 percentage points from the time of their application.

Henderson Land’s new project nets HK$330 million on first-day sale

“Many customers may be able to pass the stress test now amid a low-interest-rate environment, but they may not be able to pass the threshold next year,” Cheung said. “Developers would also like to launch the projects to sell now before the rate rises. As such, we are going to see a lot more new flat transactions in the coming months.”

The Kerry Properties’ project located at 10 La Salle Road, Kowloon, is a traditional low-density luxury residential area famous for its nearby prestigious schools. The 10 LaSalle is a 17-storey building, providing 73 units in total. The other 12 three-bedroom units and one four-bedroom unit are sold via tender.

Ahead of the sale, 10 LaSalle received 900 registrations from interested buyers, meaning about 15 interested buyers were going after each of the 60 units on offer Saturday.

Separately, Henderson Land sold nine of 28 units on offer by 6pm on Saturday at the residential project The Quinn Square Mile in Tai Kok Tsui. The units are all one-bedroom flats and studios

The cheapest unit measured 206 sq ft was offered at a price of HK$4.54 million, while the most expensive flat measured 320 sq ft for HK$7.21 million.

Po said The Quinn Square Mile units are left over, so the sale would be at a slower pace than other new projects. However, there are still some buyers interested in the project, especially younger ones.

The sale of property has bounced back this month after the fifth wave of Covid-19 subsided in the city. Hong Kong had no new flat sales in February and March, as the outbreak and social distancing measures linked to the city’s caused developers to delay new project launches.

The Quinn Square Mile, with 614 units in total, also featured two-bedroom flats, with the largest measuring 382 sq ft. The first-batch units were earmarked for sale at an average launch price of HK$23,928 per square foot after discounts offered by the developer.