JPMorgan Chase said in a report that it is expected that Hong Kong will enter an inflation cycle this year, coupled with the abundant capital in the world and Hong Kong, asset prices will rise. The bank also pointed out that property prices in Hong Kong have risen 3.9% so far this year, which is still 4% from the all-time high in 2019, and property prices are expected to rise 5-10% for the whole year. Given the fragility of the economic recovery, the government is unlikely to take tough measures against rising asset prices.

The report also pointed out that real estate is considered to be one of the best ways to hedge against inflation in Hong Kong, and the trend of housing prices is often highly related to the CPI of Hong Kong and China. The bank also pointed out that compared with the US 10-year bond yield and the Central Plains City leading Index, the correlation between the two is positive, that is, property prices usually rise during the period of rising interest rates, and the increase in demand will offset the increase in financing costs.

The bank also pointed out that calls for positive views on real estate stocks have been going on this year, believing that money supply and real estate price growth expectations will accelerate the further rise in share prices, continue to prefer 0016.HK and 0083.HK, and are expected to have a strong project supply this year.