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Hong Kong’s buoyant home sales to fight gravity of continued high interest rates as cut hopes dwindle, analysts say
- Property agents have raised sales forecasts for the year amid project launches at discounted prices, but lack of a rate cut could pare those estimates
- Developers are likely to continue pricing projects low to keep their transaction volumes up, an analyst says
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Dwindling hopes for an interest-rate cut this year could put a damper on surging Hong Kong home sales, according to analysts.
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As of Tuesday, 5,109 new homes have been sold in Hong Kong in 2024, roughly half of the full-year total in both 2022 and 2023, according to data compiled by Midland Realty.
As developers rush to put new projects on sale at discounted prices to take advantage of the suddenly buoyant buying sentiment, property agents have raised their 2024 sales forecasts. Midland Realty, for example, now expects 18,000 new homes to sell this year, up from a previous estimate of 14,000.
However, interest rates, which remain at their highest level since 2007, could spoil the party, analysts said after a speech on Tuesday by US Federal Reserve chairman Jerome Powell tempered hopes of an imminent rate cut. Economists now expect any rate reduction to be delayed until at least September and possibly next year.
Should the rate cut not materialise at all this year, buyers may hesitate to purchase homes, said Buggle Lau Kai-fai, Midland’s chief strategist.
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