This file photo dated April 11, 2023 shows residential buildings in Hong Kong. (ANDY CHONG / CHINA DAILY)

Real estate agents in Hong Kong expect the city’s residential house prices will register a mild recovery next year as the market will be supported by a likely US interest rate cut.

Last weekend, residential transactions in Hong Kong’s 10 major housing estates brokered by Midland Realty and Centaline Property recorded an increase on a weekly basis, as these two real estate agents each registered nine transactions.

While the two agents facilitated residential transactions in Taikoo Shing, South Horizons, Whampoa Garden and Mei Foo Sun Chuen, they did not record any transaction in New Territories’ housing estates such as Kingswood Villas in Tin Shui Wai, City One Shatin in Shatin, Metro City in Tseung Kwan O, or Caribbean Coast in Tung Chung.

Sammy Po, chief executive officer for Midland Realty’s residential sector in Hong Kong and Macao, expects Hong Kong’s residential property prices to rise by about 5 percent next year to reflect interest rate changes in the United States.

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As the market predicts (US) interest rates will be cut three times next year, this is positive news for the market, increasing buyers' confidence and stimulating market atmosphere.

Louis Chan, Centaline Property Asia Pacific Chief Executive Officer (Residential)

“When the US Federal Reserve keeps interest rates unchanged, the market is looking forward to a peak in US interest rates and a reduction in interest rates next year, which will be beneficial to the market outlook. Therefore, even though the end of the year is approaching, whereas traditional festivals and overseas travel factors may affect property transaction, there are still many potential homebuyers looking for bargains in the market,” Po said.

Centaline Property Asia Pacific Chief Executive Officer (Residential) Louis Chan agreed: “As the market predicts interest rates will be cut three times next year, this is positive news for the market, increasing buyers' confidence and stimulating market atmosphere.”

“With strong market demand, prospective homebuyers are mainly looking for new properties, and second-hand residential flat owners have further expanded the bargaining space,” Chan said.

Eric Tso Tak-ming, chief vice-president of mReferral Mortgage Brokerage Services, suggests the Hong Kong SAR government should further relax property market tightening measures to stimulate property transactions and market development.

READ MORE: Midland lowers forecast for HK home prices

“In theory, when the US interest rate hike cycle is expected to have peaked, Hong Kong's current interest rate hike cycle is also expected to be ended. We suggest when interest rates have peaked, the government can further fine-tune the stress test requirements to make it easier for homebuyers to pass income requirements and help them to access mortgage loans more easily,” Tso noted.