Rate hike clouds home prices, rents support market
HK01 · 4 SOURCESabout 1 hour ago6 MIN
Summary
The US Federal Reserve raised rates by 0.25 percentage points, prompting the Hong Kong Monetary Authority to lift its base rate, but major local banks had not immediately raised their prime rates on Thursday. Market figures and property executives said that combination could soften the immediate hit to mortgage costs, even as some warned further US tightening this year and next could restrain Hong Kong home-price gains.
Key Points
- Centaline Group founder Shih Wing-ching (施永青) said one US rate increase alone would not curb inflation effectively, and he expects another hike this year with possible further increases next year.
- Shih said Hong Kong’s rental market is active and rents are rising steadily, which could buffer the housing market and make the impact of higher rates “not too severe”.
- On prices, Shih forecast overall residential values would rise only 1% to 2% in the fourth quarter, with second-half gains of about 2% to 3%.
- Wheelock Properties vice chairman Ricky Wong Kwong-yiu said banks’ decision to keep prime rates unchanged for now helps stabilise buyer confidence and avoids an immediate rise in mortgage repayments.
- CITIC Pacific Property Agencies director Li Siu-man said strong banking liquidity and policy support for talent, universities and direct-subsidy schools could reinforce long-term rental and housing demand.
- Midland Group chief executive Sammy Po Tai-yeung said Hong Kong banks did not immediately follow the US move, maintained a 15% full-year home-price growth forecast, and estimated September first-hand sales could reach about 1,500 deals.
- Midland said more than 790 first-hand transactions were recorded in the first 16 days of September, versus 379 in the same period of August, while luxury homes above HK$100 million logged 22 deals.
- Separately, Centaline launched “Centaline Window View”, integrating mapping, big data and 3D digital maps to simulate living-room views for about 400,000 private flats in 143 estates.
Why It Matters
For Hong Kong buyers and landlords, the immediate question is whether mortgage costs start rising locally or whether rents and leasing demand continue to offset tighter US policy. The split in forecasts — from Shih’s modest near-term price gains to Midland’s 15% full-year rise — suggests the next moves by US rates and Hong Kong banks could shape both transaction momentum and pricing expectations.