Li Fang: Maintaining Forecast of Hong Kong’s Annual Property Prices Showing L-shaped Trend, with a Maximum Decline of 5%

After the withdrawal of the cooling measures by the Hong Kong government, the property market has shown signs of rebound, with both prices and transaction volume rising monthly. However, factors such as high interest rates and the accumulation of inventory of new properties continue to slow down the pace of price recovery, maintaining the prediction that the trend of property prices this year will form an “L” shape. There is still a chance of a 3 to 5% decrease in the first half of the year, with a slight recovery in the second half, resulting in a maximum annual decline of up to 5%.

According to Wang Zhaoqi, Director of Research and Consultation at Lafarge Greater China, the market anticipates a slight delay in the interest rate cut in the United States, with Hong Kong expected to begin reducing rates no earlier than the second half of the third quarter. The high interest rate factor will continue to affect buyers, home swappers, and new mortgage applicants in the first half of the year. The inventory of new properties needs to be reduced by another 8,000 to 10,000 units before a significant rebound in property prices can be seen.

He expects that after the market digests the positive news, monthly transaction volumes in the property market will hover around 5,000 cases. With insufficient purchasing power in the market before the rate cut, the annual transactions of both primary and secondary properties are expected to range from 48,000 to 53,000 units throughout the year.