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The interest rate cut will not stop the property prices falling
2024-9-14
Will the United States Federal Reserve Board's interest rate cut announcement after September 18 meeting be the last most important policy to save Hong Kong's property market? In fact, developers and property agents have made every effort to promote the positive impact of interest rate cut on the property market.
In March of this year, the government withdrew the cooling measures of property market, which really gave a strong boost to the  market at that time. As a result, the property market rebounded immediately, and the sales of the first-hand properties was double in a month. However, this rebound was completed two months later. Since then, the transaction prices and volumes of first and second-hand properties have been falling. Therefore, the property market, which has been frozen for four months, is waiting for financial savior to save it again.
In order to grasp the potential market rally that may occur after the interest rate cut, the major developers had announced the public sales’ deployment of its new projects after September, and the agency executives tried their best to comment the rate cut to have a positive impact to the property market so that it could create a better market sentiment.
Public opinion is overwhelmingly positive, but the recent second-hand property prices are falling lower and lower. Recently, the transaction prices of small two-bedroom units in many second-hand housing estates in the New Territories have dropped to Hk$3 million. Landlords seem not to believe that the property market will recoil immediately after the interest rate was cut, so the recent low prices' transactions were increasing in large numbers.
Indeed, the telltale sighs reveal that the property market is in downward trend. Only the interest rate cut factor does not have the power to reverse this trend. Even if the interest rate cut ignites the property market again, it does not mean that the bull market is coming back. As expected, the property prices will fall fifteen percent more after the powerless rebound. Eventually, when the property hit the bottom, it will not bounce back in a brief period. In fact. It will move horizontally in this position for a lengthy period of time. This situation is as the current securities market which has been entering into the prolonged bear market.
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