Invesco: Hong Kong interest rates plus 2% of the property prices fell 10%

As the US interest rate keeps rising, the market expects banks in Hong Kong to raise their prime rate (P) this year at the earliest. Invesco, chief economist at Invesco, believes that Hong Kong’s interest rate will have to rise at least 2% and the property market in Hong Kong will have a 5% to 15% decline.

Pray for living means that the interest rate difference between Hong Kong and the United States is mainly affected by the inflow of funds from China and other parts of the territory to Hong Kong while the interest rate of Hong Kong is between the United States, Europe and Japan. It is believed that the U.S. Federal Reserve will continue to raise interest rates and rise to 3 in 2021 At the same time, the Hong Kong interest rate will also rise. However, it is expected that the rise in Hong Kong interest rates will reach more than 2%, triggering a major adjustment in property prices.

High valuation is not enough to shake the market

At present, the global low interest rate environment has not changed. He pointed out that asset prices have risen due to the low interest rate environment. Many investors worried that bonds and stock markets would be drastically adjusted last year but they have never seen any obvious market entry. Although the current stock and real estate valuations are high, But a high valuation alone is not enough to destabilize the market.

He explained that the current high asset prices are not based on high leverage, but based on very low interest rates. As long as the central bank prudently raised interest rates and the expansion of the business cycle continues, the financial markets can continue to discount the profit growth in the coming years.

On the economic front, Chi Hang said that the economy of Europe and the United States will turn positive this year and that the growth momentum of most emerging economies will continue to improve. The economies of China and India continue to grow steadily. China’s economic growth this year is expected to be about 6.6% and consumer price inflation will be 1% . He said that over the past year, many overcapacity problems in the steel, coal, electricity and other industries in the Mainland have greatly improved. At the same time, credit growth has slowed to the lowest level since the financial crisis and no credit crunch like the Lehman incident is expected. .

It is widely expected that global inflation will slightly warm this year. Pray that the mature economies have been implemented a few years wide, but the rapid expansion of loans and deposits are not yet due to the banks need to reorganize the balance sheet and the regulatory tightening This has led to a slowdown in credit growth and a simultaneous slowdown in currency growth, resulting in low inflation.