Overseas Chinese Yongheng expects property prices to fall 15% next year

OCBC Bank research report pointed out that the Sino-US trade war escalated, and the Fed’s position hawks, Hong Kong stocks gradually retraced, weakening the wealth effect, market investment sentiment significantly weakened, overall the property market volume will continue Staying in the doldrums, the property price index is expected to fall by 15% by the end of 2019.

The OCBC research report said that the banking industry in Hong Kong raised interest rates in September, and the market is worried that interest rates will continue to rise. Moreover, the economic growth rate of the Mainland and Hong Kong has shown signs of decline. Hong Kong residents are pessimistic about the salary increase. In addition, since the Hong Kong Government announced its policy address this year, the market’s expectation of an increase in the supply of public housing has been heating up. Some housing demand has shifted from the private property market to the public housing market. The property market will continue to show signs of downturn.

The report also mentioned that the US dollar against the Hong Kong dollar fell to a level of 7.83 yuan last week after falling to a new low of more than a month on November 2. The Hong Kong dollar remains stable, and there are two main reasons behind it. The first is the stock market capital inflows, and the second is the resurgence of the market’s hopes for the “Study Conference" at the end of the month. Although the spread between Hong Kong and the United States has widened, it has not brought significant downward pressure on the Hong Kong dollar. In addition, the rise in the renminbi is also positive for the Hong Kong dollar.

Stepping into December, local banks may reserve funds for “whitewashing the window." In addition, the market expects that the optimal lending rate will increase, which may drive it to prepare in advance. In December, the one-month Hong Kong dollar interest rate may increase significantly, while the one-month and three-month Hong Kong dollar interest rate spreads may also fall from the current 105 basis points to about 20 basis points or even lower levels.