jpmorgan indicated that the most favorable interest rate in Hong Kong was reduced by a quarter point the day after the interest rate cut in the USA, earlier than expected. However, the latest actual mortgage rate is 3.875%, still higher than the average gross rental yield of 3.3% and the net rental yield of 2.5% after deducting property tax. The bank mentioned that the narrowing interest rate spread is a good start, expecting a mild rebound in property market transactions and short-term stabilization of property prices. However, property prices are still expected to fall by around 5% in the next six months, mainly due to a large inventory and lackluster investment appetite under the weak rebound of the Hang Seng Index.

jpmorgan pointed out that the lackluster response of local property stocks after reducing the most favorable interest rate in Hong Kong was unexpected, with future new property sales being a key focus. If the sales situation is not strong, it may lead to profit-taking in property stocks that have outperformed the market by 11% since July. The bank prefers Hang Lung Properties (00012.HK) among real estate developers, and favors Link REIT (00823.HK) and SwireProperties (01972.HK) among house rental companies. The bank leans towards selling Sunac China Holdings (01997.HK) and shanghai new world (00017.HK). Based on investor feedback, there is an opportunity to sell shanghai real estate (00016.HK).