![Hong Kong property deals surge to their highest since August as stable interest rates lure buyers](https://www.naphjas.com/wp-content/uploads/2024/02/b47db2fe-f563-4db1-b857-664e6dde1b31_5152d60a.jpg)
01 Feb Hong Kong property deals surge to their highest since August as stable interest rates lure buyers
The surge comes amid the US Federal Reserve’s decision to hold interest rates steady on Thursday morning, the fifth time since September.
It was Hong Kong’s third straight monthly rise, as buyers’ confidence was lifted by the stable funding costs and the government’s migration programme, which allows eligible persons to pursue residency in Hong Kong through capital investment in the form of financial assets.
“Interest rates have peaked and the impact on the property market will further be reflected in the registration of property deals at the end of February and March,” said Yeung Ming-yee, senior associate director at Centaline.
![A general view of the construction site for housing buildings in Hong Kong, China. Photo: Reuters](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2024/02/01/ed368373-0074-4689-b9bf-0e6b58d4f659_1126e908.jpg)
“It shows that interest rates have peaked and in anticipation of interest rate cuts, some buyers have taken advantage of the low price to enter the market and second-hand transactions have returned to the 2,000 level,” he added.
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“The overall property market transaction volume returned to the level of more than 4,000 transactions,” said Yeung. “The number of property deals in January was also the highest in five months since the 4,660 deals recorded in August, while the value of property sales was the highest since June.”
On Thursday, HSBC, Hong Kong’s largest lender, said it was keeping its prime rate unchanged at 5.875 per cent, while deposit rates were kept steady at 0.875 per cent per annum. Hang Seng Bank also kept its rates steady.
HSBC’s decision followed that of the Hong Kong Monetary Authority (HKMA), which left the city’s base rate at 5.75 per cent, hours after the Federal Reserve kept its target range at 5.25 to 5.5 per cent in the first policy decision of the year. The pause, the fifth since the world’s most powerful central bank began raising the cost of money in March 2022, was in line with market expectations.
Meanwhile, the CIES would continue to benefit the sector, experts say. This scheme will drive portfolio diversification and ultimately boost deal volumes in the overall commercial market, according to property consultancy Colliers.