Morgan Stanley issued a report predicting that property prices in Hong Kong will drop another 5% in the first half of next year, and turn positive in the second half, leaving prices flat for the year (previously forecasted to fall by 5%). Office and retail rents are also expected to decline by 5%. Although there is valuation support, the firm believes that the performance of property stocks will continue to be poor, generally lowering the Target Price for real estate and House Rental Companies, paying attention to the sustainability of dividends, and adding two stocks with 'Sell' ratings, reducing WHARF REIC’s rating from 'Shareholding' to 'Shareholding', with a Target Price cut from 28 to 20 dollars, and Hysan Development's rating from 'Market Perform' to 'Shareholding', with a Target Price lowered from 14 to 13 dollars, believing that both companies are at risk of dividend cuts, while the performance of lease renewals has turned negative. For the Target Prices of Other property stocks, please refer to another table.

Morgan Stanley believes that weak consumer sentiment and prolonged high interest rates could mean that property prices will continue to decline in the first half of next year. A market clearing, such as property developers selling at a loss, might mark the low point for property prices in the first half of next year. Only with these conditions, positive factors like increasing mortgage ratios, abolishing the extra stamp duty, lowering mortgage rates, increasing rents, and inflow of population would help property prices rise in the second half.

Morgan Stanley prefers companies with high dividend yields that can maintain their dividend rates, such as NEW WORLD DEV (00016.HK), SINO LAND (0083.HK), and Link REIT (00823.HK). Additionally, in a high long-term interest rate environment, NEW WORLD DEV (00017.HK) maintains a 'Sell' rating due to its high debt levels, making it less favored.