Market Insight | CN Mainland Real Estate Stocks Strengthen Again, Positive Impact of Fed Rate Cut on Domestic Mortgage Policies, Increased Probability of LPR Rate Cut Within the Year
CN Mainland Real Estate stocks strengthened again, with Midea Real Estate up 8.62%, Zhongliang Holdings up 6.67%, and China Jinmao up 4.48%. The Federal Reserve cut interest rates by 50 basis points, raising market expectations for a rate cut in China. Despite the unchanged LPR pricing in September, analysts believe that the probability of a rate cut is increasing, and the central bank may lower key policy rates in the fourth quarter to further reduce mortgage costs and boost home buying consumption
According to the Wise Finance app, mainland real estate stocks have strengthened again. As of the time of publication, Midea Real Estate (03990) rose by 8.62% to HKD 3.15; Agile Group Holdings (02772) rose by 6.67% to HKD 0.08; China Jinmao (00817) rose by 4.48% to HKD 0.7; Vanke (02202) rose by 4.26% to HKD 4.41; Sunac China (01918) rose by 4.04% to HKD 1.03.
On the news front, the Federal Reserve previously significantly cut interest rates by 50 basis points, leading to an increase in market expectations for a rate cut in China. However, this morning, the September Loan Prime Rate (LPR) was announced, with both the 1-year and 5-year rates remaining unchanged. Orient Securities believes that after the significant rate cut by the Federal Reserve, there is more room for flexible adjustment in China's monetary policy, and the probability of rate cuts and reserve requirement ratio cuts in the short term is increasing. Taking into account the current economic situation and price trends, the central bank may reduce key policy rates in the fourth quarter, which will then guide the LPR to follow suit.
Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute, stated that the Fed's rate cut has a positive impact on China's loan policies, especially mortgage policies. The probability and extent of LPR rate cuts from September to the end of the year will increase. Under loose loan policies, short-term and medium- to long-term loan costs will be further reduced. As a result, mortgage costs will also decrease, helping to lower housing costs and boost housing consumption. At the same time, it will help guide further reductions in existing housing loan rates