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Hong Kong's property market is expected to see a 15% increase in home prices this year, according to forecasts from local agency Midland Realty. While this represents a substantial gain, it still falls short of the peak prices reached in 2021, which were 16% higher. Midland executives anticipate this bullish trend will continue, even as the market processes recent uncertainties.

CEO Dave Ma Tai-yeung noted that as new property developments roll out and buyers return to the market, the residential sector is projected to rebound. First-hand residential transactions, which dipped to just over 800 units in June and July, have since rebounded to 1,100 units in August. Second-hand transactions are also stabilising.

Looking ahead, first-hand property sales in the final quarter are forecast to jump by 50% quarter-over-quarter, reaching 5,100 units. Secondary market transactions are expected to rise by 10% to 12,700 units. Ma cites high rents as a factor that will allow property prices to catch up.

Benny Sham, from Midland Research Centre, added that developers will likely offer competitive prices to attract buyers from the secondary market. Historical data suggests that robust new home sales can bolster the broader housing market and prices in the secondary residential property market.

Regarding interest rates, Midland Mortgage Broker Eric Tso Tak-ming stated that even if the US Federal Reserve raises rates, Hong Kong banks may not immediately follow suit. While Hong Kong's monetary policy has been aligned with the US since 1983, commercial banks retain discretion on when and by how much to adjust their prime lending rates. Monetary pegs aside, commercial banks ultimately decide on rate adjustments.

Chief Executive John Lee Ka-chiu is scheduled to deliver a policy address next week, potentially lowering the stamp duty threshold for super-luxury homes. Despite an increase in February, demand for super-luxury properties remains robust, with over 80 high-value transactions exceeding HK$100 million (USD 12.8 million) taking place this year. This surpasses the total number from all of the previous year within just eight months, indicating a resilient market even after adjustments to the stamp duty.