Yang Haiquan, Head of Property Research at Citigroup China, expressed in a media interview that he believes transaction volumes have likely hit bottom, and after the "cooling down" measures, transactions for both new and existing residential properties may increase to a range of 3,300 to 3,500 per month. However, this remains below the levels seen during the bull market of around 5,000 transactions per month. Yang Haiquan predicts that property prices may not hit bottom until the first half of 2025.

According to Yang Haiquan's analysis, the Hong Kong property market relies on support from foreign buyers. If the mainland Chinese property market does not recover, the local Hong Kong property market will face difficulties. Currently, due to higher U.S. interest rates, mainland stimulus policies are not effectively applied.

Many mainland investors have changed their attitudes toward property ownership and are no longer purchasing properties on the mainland, leading to a diminished interest in buying Hong Kong properties. Even with the removal of the 15% stamp duty for non-local buyers by the Hong Kong government, the willingness of mainland customers to purchase Hong Kong properties is challenging to restore to previous levels.

In terms of supply, Yang Haiquan pointed out that there is an oversupply issue in the Hong Kong property market. Last year, the completion of private residential units reached 21,000, and the estimated annual average new supply for the next three years is around 20,000 units. In comparison, the estimated annual demand is less than 13,000 units. This is one of the reasons many developers are suspending land acquisitions.

A developer revealed that construction costs have not decreased, and considering interest and marketing costs (such as commissions), their acceptable land costs are limited. Developers need to consider opportunity costs; if they wait a year to launch a new project, they will incur an interest cost of about 5%. If funds are used to pay off debt or placed in a fixed deposit, it is equivalent to a 5% return. Therefore, if the expected price increase a year later is less than 5%, developers are more inclined to launch projects early to obtain cash flow rather than waiting.

Due to falling property prices, unchanged construction costs, and compressed investment returns, developers' willingness to acquire land has significantly decreased. Six land plots have already been left unsold this year, including the MTR Corporation's (0066) Tung Chung Station Phase 1 project. This is mainly due to oversupply in the area, making it difficult for developers to estimate sales, meet standard requirements, and win the bid.

However, with falling property prices and unchanged construction costs, developers are more alert to the safety of investment returns. Currently, the property market is soft, and interest payments for a year amount to a 5% loss. Therefore, developers entering the market to acquire land at this stage will, on average, demand a 20% profit to ensure profitability even after a 10% decline in property prices. For luxury projects with longer sales cycles, the land response may be even worse.