Knight Frank's latest "Hong Kong Monthly Property Market Report" points out that this year's "Policy Address" announced an increase in the maximum loan-to-value ratio for all properties to 70%. With the cancellation of all measures cooling the property market, and lower interest rates, in the long run, Knight Frank expects more high-income local and overseas professionals to enter the mid-to-high-end residential property market. However, it is expected that overall residential property prices will continue to be under pressure in the short term, despite the recent rate cut, interest rates are still relatively high. Due to developers actively promoting new properties to drive sales, secondary residences will continue to be under pressure.

In terms of Grade A office buildings, in September of this year, Grade A office buildings in the Hong Kong Island area continued to face challenges. The overall rent of Grade A office buildings in the Hong Kong Island area continued to drop to HKD 61.9 per square foot, a 6.8% year-on-year decrease, and a 3.6% decrease from the beginning of the year. Due to the overall stagnation in office leasing demand, the vacancy rate of office buildings in Hong Kong Island remains as high as 13.4%. Looking positively, there have been improvements in market dynamics with more office expansion activities recorded. As for Kowloon, in September, the volume of new office leases decreased by 25% monthly. Due to limited new demand for office spaces, the average monthly rent slightly declined to HKD 22.5 per square foot.

Looking ahead, benefiting from the rate cuts and the gradually improving stock market sentiment, Knight Frank expects the overall business atmosphere and leasing activities of Grade A office buildings in the Hong Kong area to gradually improve. In addition, the government announced in the 2024 "Policy Address" its active development of the "Headquarters Economy" to attract companies from home and abroad to establish headquarters or branches in Hong Kong. Knight Frank hopes that this policy will bring in large multinational corporations to Hong Kong and drive overall local office leasing activities. As for the Kowloon area, Knight Frank expects office rents in East Kowloon to continue to decline until the end of the year, possibly resulting in more relocation cases. Therefore, it is expected that office rents for Grade A offices in the Kowloon area will decrease by 1% to 3% this year.

Regarding the retail property market, Knight Frank believes that the market is still adjusting and adapting to new consumption patterns of tourists and local residents. In the short term, mall owners are more flexible in rent negotiations to maintain higher occupancy rates. Prime street-front shops in core areas remain attractive to investors waiting for a market rebound. Due to the continued difficulties in the retail market, retailers and eateries remain cautious about further expansion.