Some market participants expect that the US interest rate will eventually increase to 5.5%, it is expected that after the 22nd of this month, the Hong Kong prime rate (P) will follow the increase of at least 0.125%, but the increase of P may not have much impact on the local property market, generally only slightly increase the bargaining space.
In areas with ample supply of flats, some owners have reduced their prices to put up their properties, with the rate of reduction in Yuen Long District ranging from 4% to 6%.
Centaline Property's Wong Chin Hok revealed that some properties in Yuen Long were offered at reduced prices, for example, Flat D in Block 1 of Sheung Yuet Ling, with a saleable area of 254 sq ft, was offered at a 6.25% reduction from $4.8 million to $4.5 million.
For example, Flat E in Block 8 of The Riverpark, with a saleable area of 553 sq ft, was reduced by 5.9% from $6.8 million to $6.4 million, while Flat F in Block 4 of Sun Yuen Long Centre, with a saleable area of 466 sq ft, was reduced by 4.17% from $7.2 million to $6.9 million.
Other housing estates in the New Territories have recently recorded transactions of reduced price units. Century 21 Kee Fung Properties' Ms. Yeung Lai-kuen said that the bank has recently recorded a transaction of a flat in Pik To Garden, Shatin, with a practical area of 760 square feet, a 3-bedroom (1 set) 2-bathroom interval, facing northwest and looking at the Shing Mun River view. The original asking price of $10.8 million was reduced by $1.3 million, or 12%, before the buyer finally took over the property at $9.5 million, with a practical footprint of $12,500.
It is understood that the original owner purchased the above site in October 2012 for $7.05 million and has held the property for 11 years, selling it with a profit of $2.45 million and a 35% appreciation in the value of the unit over the period.
The overall secondary market has not reacted much to the Fed's "hawkishness", with individual owners still asking for strong prices. It is believed that the focus is on the significant benefits of the full customs clearance between the Mainland and Hong Kong, so the interest rate has not affected the property market for the time being.
When I was on the sales floor of a new development in Tuen Mun yesterday, few of the customers attending the event mentioned the Fed's "hawkishness", and I did not see any customers not attending because of the "hawkishness" news. He believes that the impact on the property market will depend on whether the Fed's interest rate hike will be significantly higher than the upper limit of market expectations.
Mr. Edmund Tsao, Chief Vice President of Mercer Mortgage Referral, said that the US employment data is now strong and the inflation rate remains high. If the inflation rate announced next week is higher than expected, it is believed that the rate hike may strengthen, and there is even a chance of a 0.5% rate hike.
In addition, after the HKMA received money twice last month, the 1-month HIBOR has rebounded sharply by more than 1% from 2.12% on February 14, i.e. the low of this year. Tsao expects HIBOR to rise repeatedly to the level of 4% in the near future, and local banks may have the opportunity to resume following the US interest rate hike after the US interest rate meeting this month by raising the prime rate P by about 0.125% to 0.25% due to the pressure of funding cost.
Mr Tsao said that prospective home buyers should pay attention to interest rate movements and changes in the market environment to choose the most suitable mortgage product.
