HSBC Research report pointed out that there has been a fundamental shift in China's policy direction, returning to a focus on promoting economic growth. Compared to July, Shi Yongqing, the founder of China Resources Group, has become more optimistic about the trend of residential prices in China, especially in first-tier cities, as the volume of internal houses transactions surged, indicating an initial stabilization in the market.

As for Hong Kong, the report mentioned that Shi Yongqing pointed out, the local property market is becoming more favorable due to the start of the US interest rate reduction cycle and the recovery of the mainland real estate market. He also believes that the property market in Hong Kong does not suffer from an oversupply issue, and the pressure on property prices is mainly caused by economic headwinds and price reductions by developers.

HSBC Research believes that, with the interest rate reduction cycle, supportive policies, and expected positive wealth effect, the property market in Hong Kong will experience a recovery. Regarding internal houses, as the supportive policy direction becomes clearer, coupled with potential further stimulus policies, the bank expects sales to rebound and improve compared to three months ago. The bank prefers eight stocks, namely China Overseas (00688.HK), China Resources Land (01109.HK), Longfor (00960.HK), China Resources Mixc (01209.HK), KE Holdings (BEKE.US), New World (00016.HK), Kerry Properties (00683.HK), and Cheung Kong (01113.HK), all rated as 'buy'.

Stocks | Investment Rating | Target Price

China Overseas (00688.HK) | Buy | HK$19.4

China Resources Land (01109.HK) | Buy | HK$35.6

Longfor (00960.HK) | Buy | HK$20.5

China Resources Mixc (01209.HK) | Buy | HK$44.2

KE Holdings (BEKE.US) | Buy | $34.3

New World (00016.HK) | Buy | HK$ 116

CK Asset (01113.HK) | Buy | HK$ 44.6

Kerry Properties (00683.HK) | Buy | HK$ 19.6