Hong Kong Property Boom Surges in September Amid Rate Cuts and Strong Stocks
Hong Kong Property Market Shows Signs of Stabilization
Official data has revealed a significant increase in both the volume and value of property sales in Hong Kong during September, indicating that the city\’s real estate market is showing signs of stabilization. This growth comes as the sector benefits from easing monetary policies and a revitalized stock market.
Total property deals in September reached 6,870 units, marking a 6.3% rise compared to the previous month. The total value of these transactions also increased by 11.9%, reaching HK$53.48 billion (US$6.87 billion), according to the Land Registry. This upward trend was even more pronounced when compared to the same period last year, with the number of deals jumping 79% and the total sales value soaring by 93.4%.
Residential property sales also saw a notable increase, rising by approximately 6.7% to 5,643 units. This marks the seventh consecutive month where residential deals have exceeded 5,000 units, reflecting a consistent demand for housing in the city.
The official sales figures align closely with estimates from two of Hong Kong\’s largest property agencies, Centaline Property Agency and Ricacorp Properties. Centaline had predicted a 6.2% increase in overall deals to 6,862 units, while Ricacorp anticipated 6,883 units. These projections suggest that the market is on a positive trajectory.
Yeung Ming-yee, a senior associate director at Centaline, highlighted several factors contributing to the improved sentiment in the property market. \”With interest rate cuts reinstated in September, the Hang Seng Index continuing its upward trajectory to a four-year high and the recent policy address relaxing investment immigration requirements, sentiment in the property market continued to improve,\” she said. Yeung added that this could lead to a slight increase in transactions and potentially push total registrations back above 7,000 in October.
The rebound in property sales reflects a broader stabilization of the local market. According to the latest official data released in September, lived-in home prices rose by 1.26% since April. Additionally, home rents recorded a 1.12% increase—the largest increment in 14 months—reaching 198.7, just 1.4 points below the peak of 200.1 recorded in August 2019.
The impact of the US Federal Reserve\’s 25-basis point rate cut was felt in Hong Kong, as the Hong Kong Monetary Authority followed suit on September 18. This led to a 12.5-basis point reduction in the prime lending rates of the city\’s three note-issuing banks: HSBC, Standard Chartered, and Bank of China (Hong Kong).
Meanwhile, the city\’s stock market experienced a significant surge, with funds raised from new share sales jumping by 220%. This helped the Hong Kong stock exchange maintain its position as the top global initial public offering (IPO) market.
According to property agents, the performance of the stock market is closely linked to local property sales, although there is typically a lag. Affluent buyers have started to reallocate part of their profits from the stock market into luxury home purchases.
During the first nine months of the year, a total of 66 companies raised US$23.27 billion on the main board of the Hong Kong stock exchange, according to data released by the London Stock Exchange Group. This places the city\’s bourse well ahead of the New York Stock Exchange, which ranked second with US$16.53 billion, and the Nasdaq stock market in third with US$15.32 billion.
Derek Chan, head of research at Ricacorp, noted that with several public holidays in October, the number of property deals likely to be completed could slow down. This might test the 6,240 level, potentially marking an eight-month low.
