Zhongyuan: Expected that the actual interest rate on Hong Kong property market may fall to 3.75% by the end of the year
The Federal Reserve announced an overnight cut in the federal funds rate by 50 basis points to a range of 4.75% to 5%. At the same time, HSBC announced a reduction in the prime rate (P) by 0.25% to 5.625%. Wang Meifeng, Managing Director of Central Mortgage, pointed out that HSBC's 0.25% reduction in the prime rate (P) has a benchmark effect, and other banks are expected to follow suit. Hong Kong has entered an interest rate cut cycle following the United States. She expects that by the end of this year, the actual market interest rate could drop to 3.75%, easing the burden on property buyers. She stated that the U.S. interest rate cut of 0.5% exceeded market expectations. Combined with the recent faster decline in Hong Kong dollar interest rates than in the U.S., banks are prompted to immediately accelerate the interest rate cut cycle. The reduction in P by banks allows for a simultaneous decrease in the mortgage rates for new mortgages and property buyers. The main market interest rates (including HIBOR and prime rate) are reduced to 3.875% (calculated as market H + 1.3% capped at P - 1.75% (P: 5.875%). A 0.25% decrease in P translates to an actual interest rate reduction from 4.125% to 3.875%). It is expected that the total interest rate cut in the U.S. this year could reach 1%
According to the Wisdom Finance APP, the Federal Reserve announced an overnight cut in the federal funds rate by 50 basis points to a range of 4.75% to 5%. At the same time, HSBC announced a cut in the best lending rate (P) by 0.25% to 5.625%. Wang Meifeng, Managing Director of Central Plains Mortgage, pointed out that HSBC's 0.25% cut in the best lending rate (P) has a benchmark effect, and other banks are expected to follow suit. Hong Kong has entered an interest rate cut cycle following the United States. She expects that by the end of this year, the actual market interest rates could continue to fall to 3.75%, easing the burden on property buyers.
She stated that the 0.5% rate cut by the United States exceeded market expectations. Coupled with the recent faster decline in the Hong Kong dollar interbank rates, the rate cut has been greater than that of the U.S., prompting banks to immediately accelerate the start of the rate cut cycle. The reduction in P by banks allows the mortgage rates for new properties and property buyers to simultaneously decrease. The main market interest rates (including H rates and P rates) are reduced to 3.875% (calculated as market H+1.3% capped at P-1.75% (P: 5.875%)). A 0.25% decrease in P means that the actual interest rate decreases from 4.125% to 3.875%. It is expected that the total rate cut in the U.S. this year could reach 1%