Outlook for Hong Kong’s property market brightens as end of interest rate increases in sight, analysts say

Overall home sales in Hong Kong could reach 66,000 units this year, up from 45,000 last year, analyst says

Major Hong Kong banks left their best lending rate unchanged even after the Hong Kong Monetary Authority raised the city’s base rate to a 15-year high of 5.25 per cent

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Hong Kong’s housing market is expected to recover amid a host of positive developments that could push overall sales 50 per cent higher year on year in 2023, market observers said. Dickson Lee

Published: 8:30am, 24 Mar 2023Updated: 12:05pm, 24 Mar 2023

With Hong Kong likely to have reached the peak of interest rate increases, sales of new and lived-in homes could hit 66,000 units this year, up nearly 50 per cent from last year, according to one analyst.

Market observers are confident the city’s property market is likely to improve further during the rest of the year, boosted by a number of positive developments, including the release of pent-up demand as well as the return of mainland Chinese buyers following the reopening of the border.

The Hong Kong Monetary Authority on Thursday raised the city’s base rate to a 15-year high of 5.25 per cent, after the US Federal Reserve increased its target rate by a quarter point to a range of 4.75 per cent to 5 per cent. However, Hong Kong’s major lenders did not follow suit. HSBC and Bank of China (Hong Kong) kept their best lending rates unchanged at 5.625 per cent, while Standard Chartered kept its prime rate unchanged at 5.875 per cent.

“With the interest rate hikes [most likely] coming to a halt, this will definitely benefit first-time buyers because they are quite price-sensitive and interest-rate-sensitive,” said Buggle Lau Kai-fai, the chief analyst at Midland Realty, adding that “majority” of potential buyers in the city are first-time buyers.

Residential transactions in Hong Kong have picked up pace this year. Xiaomei Chen

A total of 13,161 residential units, comprising 1,958 new homes and 11,203 lived-in units, have been sold in Hong Kong between January 1 and March 22, Midland said, citing Land Registry data.

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