Last week, the landing of the unexpected rate cut by the Federal Reserve pushed global asset prices higher, and the Hong Kong stock market also experienced a strong rebound, with the Hang Seng Index successfully surpassing the 18,000-point mark. Citic Securities said that for Hong Kong stocks, which have already fully reflected pessimistic expectations in the prices, this rebound is expected to continue and become a monthly-level recovery market.

During this rebound, Hong Kong real estate stocks have also continued to perform well. In the past 5 trading days (September 13th-September 20th), $NEW WORLD DEV (00017.HK)$ the price has surged more than 21%. $CHINA VANKE (02202.HK)$Please use your Futubull account to access the feature.$CHINA JINMAO (00817.HK)$Please use your Futubull account to access the feature.$LONGFOR GROUP (00960.HK)$Please use your Futubull account to access the feature.$RADIANCE HLDGS (09993.HK)$Please use your Futubull account to access the feature.$SUNAC (01918.HK)$Please use your Futubull account to access the feature.$C&D INTL GROUP (01908.HK)$Please use your Futubull account to access the feature.$GREENTOWN CHINA (03900.HK)$Please use your Futubull account to access the feature.$CHINA RES LAND (01109.HK)$ Average increase by over 10%, $SEAZEN (01030.HK)$ also rose nearly 10%.

It is worth noting that today some real estate stocks continue to rise in recent times, with $CHINA AOYUAN (03883.HK)$ Soared over 107% in one day. $CHINASOUTHCITY (01668.HK)$ Rose more than 5%.

In terms of news, China Aoyuan recently announced that Multi Gold Group Limited, a Middle Eastern investment group, has become a new strategic investor in China Aoyuan and has entered the board of directors to take on the position of Chairman of the Board.

Fed rate cut is implemented! A new opportunity for the real estate sector?

In the short term, with the implementation of the Fed rate cut, the market's sales expectations for the real estate market in the peak season of September have increased.

It is worth noting that although the latest announced September loan market quote rate (LPR) remains unchanged and has not met the market's expectation of following the Fed rate cut, there is still consensus within the industry that the LPR will continue to decline in the year.

Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute, believes that there is still room for further downward adjustment of the LPR in the future, which will help further reduce the cost of housing loans and promote the recovery and healthy development of the real estate market.

On the other hand, benefiting from the expectation of loose liquidity brought by the rate cut, the land auction market has become active again recently, with many real estate companies bidding at a premium, highlighting a recovery in industry confidence.

Regarding the opportunities in the real estate sector, Zheshang Securities pointed out that the low point of the real estate industry index in September may be a good time to layout real estate. With the release of performance pressure of real estate companies after the mid-year report season, there is an opportunity for valuation recovery in the real estate sector driven by policy intensification and seasonal improvement in fundamentals. Concerning real estate company allocation, it is recommended to focus on improving leading developers that are expected to become long-term leaders in segmented areas, as well as top real estate companies with superior operation assets under the new real estate model, or to take the lead in valuing switching logic.

CITIC Securities also stated that there is no sign of spontaneous bottoming out in the market, but there is still ample room for policy intervention. Mortgage loan interest rates, provident fund loan quotas, personal income tax deduction of mortgage interest, stockpiling of existing houses, and household registration for home purchase all have room for enhancement. The bank believes that if demand-side policies are introduced, it is hoped that the market downturn can be reversed.

From an investment perspective, the real estate sector is still at its historical valuation bottom. Ping An Securities believes that the medium-term trend opportunity lies in the stabilization of the volume and price of the real estate market, and the medium-term opportunity may outweigh the risks. In terms of allocation, it is recommended to focus on quality real estate companies with lighter historical burdens and optimized inventory structure.

In addition, market views believe that the impact of the recent Fed rate cut on the Hong Kong stock market is most directly reflected in the flow of funds, and the Hang Seng Index has attracted inflows of incremental capital, driving the rebound of the real estate sector.

Real estate is highly sensitive to interest rates, and the expected rate cut by the Fed is expected to trigger a series of rate-cutting effects. As central banks around the world implement loose monetary policies, the impact of the financial market on the real estate industry will be transferred to the physical market, and the improvement of the industry's fundamentals will further drive the recovery of the sector's valuation.

Leo Cheung, CEO of Ricacorp Properties, also stated recently that HSBC and Bank of China, the leading banks in Hong Kong, have followed suit in lowering their best lending rates by 0.25 basis points. This is the first interest rate cut after local banks have continuously raised interest rates and maintained high mortgage rates for a long time, which has surprised the market and will greatly help stimulate the stagnant property market. Observing the current abundance of market funds, it is believed that the interest rate cut can drive some funds to flow into the physical asset market.

However, Jones Lang LaSalle Hong Kong Chairman Fred Au believes that the rate cut by the United States is good news for the market. However, interest rates are only one of the factors affecting the property market, and the trend is still influenced by other economic factors. Currently, the economy is still weak. At the same time, developers will aggressively launch new projects due to the good news of the rate cut, leading to intensified competition. As a result, the pricing of new projects may be more conservative, or even lower, in order to attract buyers. The pressure on the property market still exists.

Editor/Somer