Market Insight | Hong Kong Property Stocks Rise in Early Trading, Hong Kong Property Market is Recovering in the First Half of the Year, Probability of Fed Rate Cut in September Rises to a High Level
Hong Kong property stocks rose in early trading, with the Hong Kong property market rebounding in the first half of the year and the probability of a Fed rate cut in September rising to a high level. In the first half of this year, the transaction volume of first-hand residential properties in Hong Kong increased by nearly 40%, and a research report by Fuli stated that the Hong Kong property market is recovering, which is favorable for developers. The US CPI data fell short of expectations, leading to a high probability of a rate cut in September. It is expected that the US may cut interest rates in the second half of the year, with the transaction volume of first-hand residential properties expected to increase by nearly 5% for the whole year. Stocks of companies like Swire Properties and New World Development in the property sector have seen significant gains, with a preference for developers' stocks over rental stocks
According to the Wise Finance APP, Hong Kong property stocks are generally up. As of the time of publication, Wharf Real Estate Investment (01997) rose by 4.62% to HKD 21.5; Henderson Land Development (00101) rose by 4.33% to HKD 6.98; Cheung Kong Property Holdings (01113) rose by 3.83% to HKD 31.2; New World Development (00017) rose by 3.52% to HKD 7.93; Swire Properties (01972) rose by 3.27% to HKD 13.28.
On the news front, in the first half of this year, Hong Kong's first-hand residential market has recorded approximately 8,800 transactions, an increase of nearly 40% year-on-year, with a total value of about HKD 111 billion. Credit Suisse released a research report stating that the residential building sales data in Hong Kong shows that the Hong Kong property market is recovering in the first half of the year, which is positive for developers. Even if there may be more price cuts for new projects in the third quarter, strong leasing activity will support asset yields and attract investment demand, indirectly helping sales. Therefore, the bank still prefers developer stocks over rental stocks.
Furthermore, on Thursday evening, the U.S. CPI data fell short of expectations, raising the probability of a rate cut in September. Victor Tin, Vice Chairman of Asia Pacific and President of the Residential Department of Midland Realty, believes that developers are likely to offer attractive prices for new projects to clear inventory. Coupled with the possibility of a rate cut in the U.S. in the second half of the year, the total number of first-hand residential transactions for the year is estimated to be around 16,000, an increase of nearly 5% from last year. Stanley Wong, Chairman of the Real Estate Developers Association of Hong Kong, also stated that once a rate cut is implemented later this year, property prices may rise stimulated by positive news