According to the Zhituo Finance APP, Jones Lang LaSalle states that 2024 will be a critical year for the Hong Kong Residence market, as the Hong Kong government comprehensively "withdraws policy tightening." The Hong Kong Monetary Authority is relaxing the maximum mortgage ratio, and interest rates are beginning to decline. Various measures have driven the residential Volume growth of 22.2% year-on-year in the first 11 months of this year. However, due to many unclear factors in the market, Hong Kong property prices are still expected to drop further by 6.8%.

Jones Lang LaSalle predicts that by the end of 2025, the inventory of new projects will revert to a more balanced supply-demand level. However, as of September, the number of unsold units in completed projects remains at a historic high of 20,700 units, coupled with still high interest rates. Developers face high financing costs and must continue to adopt aggressive pricing strategies to promote sales, with new project prices expected to continue to decline next year.

Zeng Huanping, Chairman of Jones Lang LaSalle Hong Kong, indicated that looking forward to 2025, interest rate trends may not be as optimistic as expected. Moreover, the current Hong Kong Interbank Offered Rate (HIBOR) still stands at as high as 4%, even higher than during previous property market recovery periods. It is expected that prices of small to medium-sized residences and luxury homes will decline by about 5%, while rents will increase by 0-5%.

The main challenge for the Hong Kong property market next year is an "oversupply." Although traditional factors such as interest rates, the economic environment, and supply-demand cycles can partially explain the reasons for the drop in Hong Kong property prices, deeper structural changes are reshaping the market fundamentals and value of Assets. Structural issues will bring more unclear directions. If next year's primary transaction Volume is 18,000, considering the more balanced period in 2021, the new supply of Residences is expected to take 58 months to digest by December 2025.

Regarding land supply, although it remains important, the Hong Kong government must prioritize more urgent needs, such as improving infrastructure and promoting the transformation of the innovation and technology economy, within limited fiscal budgets.

Qu Jianqiang, Head of the Valuation and Advisory Department at Jones Lang LaSalle, suggested that during land sales, the Hong Kong government could consider reducing additional conditions for land sales and subdividing plots for sale during economic downturns.

Qu Jianqiang added that due to high investment costs and lack of profitability, developers' interest in building Home Ownership Scheme (HOS) units continues to decline. The Hong Kong government could consider re-zoning HOS land for public housing development to address the urgent demand for public housing.