Merrill Lynch: Restarting the interest rate cut cycle boosts the atmosphere of the Hong Kong property market, expecting residential transaction volume to rise in the fourth quarter, with new projects benefiting first

On Wednesday local time, the Federal Reserve announced a significant 50 basis point rate cut, the first rate cut in over four years, lowering the target range to 4.75% to 5%. Bruce Lee, Executive Director of the Residential Department of Federal Properties, stated that the Federal Reserve's latest interest rate decision to cut rates by 0.5% at once is the first rate cut for the United States since March 2020. The rate cut not only exceeded expectations but also indicates the possibility of further rate cuts later this year. He believes that the restart of the rate cut cycle will definitely help boost the atmosphere of the Hong Kong property market, with residential transaction volume expected to increase in the fourth quarter. New developments are expected to benefit first, with the volume of first-hand transactions in the fourth quarter expected to reach 4,700 units, an increase of about 80% from the estimated 2,600 units in the current quarter. He mentioned that it is even more significant that major banks in Hong Kong have unexpectedly cut rates by 0.25%, and with the rate cut cycle starting, it is believed that there will be a flow of funds into other investment sectors. Currently, Hong Kong property prices have dropped nearly 30% from their peak, coupled with sharp increases in rents, making them highly attractive for both personal use and investment