Moreover, Hong Kong’s property prices are gradually stabilizing, and trading activity has also increased significantly. Public confidence in home ownership and investment has improved, and it is expected that Hong Kong’s real estate market will continue to experience a rise in both price and volume this year.
According to Zhitong Finance, the Federal Reserve’s interest rate meeting has concluded, with the benchmark interest rate remaining in the range of 3.5% to 3.75%. The Federal Reserve’s dot plot indicates that there will be one interest rate cut in 2026, totaling a 0.25% reduction. In Hong Kong, HSBC has announced that the prime rate (P) will remain unchanged at the current level of 5%. Cao Deming, Chief Vice President of Mortgage Referral at Jingluo, stated that the impact of geopolitical issues on inflation remains to be seen. It is expected that the Federal Reserve will begin its first interest rate cut of the year in the second half of the year. Additionally, the aggregate balance of the Hong Kong banking system remains at approximately HKD 53.8 billion. Therefore, the room for a significant decline in the Hong Kong Interbank Offered Rate (HIBOR) is relatively limited. It is projected that HIBOR will generally fluctuate between 2% and 3% in the first half of the year.
Cao Deming stated that although Hong Kong and US interest rates have not declined, the current newly created mortgage interest rates are still at a reasonable and affordable level. At present, three major banks have launched fixed-rate mortgage plans at 2.73% for the first three years, which is 52 basis points lower than the general new P-mortgage or H-mortgage plan at 3.25%, effectively helping customers reduce interest costs in advance.
Moreover, Hong Kong property prices have gradually stabilized, and trading volume has significantly increased. Public confidence in home ownership and investment has also improved. It is anticipated that Hong Kong’s real estate market will continue to see both price and volume growth this year. Recently, some banks have become more proactive in their mortgage business, actively seeking annual mortgage deals by introducing various types of incentives and increasing mortgage cash rebates to attract high-quality clients. It is predicted that the mortgage market will steadily grow alongside the real estate market this year.
On the other hand, today’s one-month HIBOR related to property mortgages was reported at 2.05446%, marking a second consecutive working day of decline. Cao Deming noted that the room for a significant drop in HIBOR remains relatively limited, and it is expected that HIBOR will hover between 2% and 3% in the first half of the year. Owners of H-mortgages will still need to service their loans at the capped interest rate of 3.25% in the short term. The typical new H-mortgage plan is H+1.3%. Unless additional funds flow into the Hong Kong banking system, pushing HIBOR below 1.95%, the actual mortgage rate and monthly repayment costs under H-mortgages could further decrease. Cao Deming suggests that those planning to buy a property who wish to save on interest costs immediately should consider the fixed-rate mortgage plan offered by three major banks at 2.73% for the first three years.
