Zhongyuan: Expected that the actual interest rate on Hong Kong property market may fall to 3.75% by the end of the year

The Federal Reserve announced an overnight cut in the federal funds rate by 50 basis points to a range of 4.75% to 5%. At the same time, HSBC announced a reduction in the prime rate (P) by 0.25% to 5.625%. Wang Meifeng, Managing Director of Central Mortgage, pointed out that HSBC's 0.25% reduction in the prime rate (P) has a benchmark effect, and other banks are expected to follow suit. Hong Kong has entered an interest rate cut cycle following the United States. She expects that by the end of this year, the actual market interest rate could drop to 3.75%, easing the burden on property buyers. She stated that the U.S. interest rate cut of 0.5% exceeded market expectations. Combined with the recent faster decline in Hong Kong dollar interest rates than in the U.S., banks are prompted to immediately accelerate the interest rate cut cycle. The reduction in P by banks allows for a simultaneous decrease in the mortgage rates for new mortgages and property buyers. The main market interest rates (including HIBOR and prime rate) are reduced to 3.875% (calculated as market H + 1.3% capped at P - 1.75% (P: 5.875%). A 0.25% decrease in P translates to an actual interest rate reduction from 4.125% to 3.875%). It is expected that the total interest rate cut in the U.S. this year could reach 1%