H
ong Kong's real estate industry is facing another challenging period after a series of shocks and crises since 2018. The city was starting to see signs of recovery in September when the US Federal Reserve cut interest rates for the first time in four years, and Beijing announced a stimulus package. Morgan Stanley had predicted that Hong Kong would benefit from lower US rates and higher Chinese economic growth.

    However, the election of Donald Trump as US President has introduced new uncertainty. His protectionist policies could harm China's economy and force the Fed to halt its monetary easing cycle. This comes at a critical time for Hong Kong's property market, which is finally benefiting from the currency peg to the US dollar.

    Hong Kong's banks have responded quickly to the rate cuts, narrowing the gap between residential rental yields and mortgage rates. This has boosted investment demand, with S&P Global Ratings reporting that yields on mass-market properties under 40 square metres have surpassed mortgage rates as of November 10.