Midland Realty has projected that Hong Kong's property market is set to gain momentum in the fourth quarter, with price growth expected to accelerate to nearly 4% during the period, while the company sustains its full-year forecast of approximately 15% appreciation. Ma Tai-yeung, Chief Executive Officer of the Midland Group and Executive Director of Midland Realty, noted that after a notable surge in both prices and transaction volumes during the first half of the year, the market entered a brief consolidation phase from late June, during which the pace of transactions in both the primary and secondary sectors slowed down.

However, recent launches of several high-profile new developments at competitive price points have garnered favorable market responses, gradually releasing pent-up demand and stabilizing transaction activity across both segments. The rental market has continued to demonstrate robust strength, with rents repeatedly hitting new highs. Ma attributed the market's resilience to a combination of factors, including the current low-interest-rate environment, improving economic conditions, sustained population and talent inflows, reduced inventory levels, ample liquidity, and rising rental yields that have enhanced investment returns. Additionally, the Hong Kong government's strong push for the Northern Metropolis development has reinforced the city's fundamental property market stability, which is now progressively emerging from the consolidation phase and building momentum for a fresh uptrend in the fourth quarter.

Looking ahead to the fourth quarter, Ma anticipates that as market sentiment improves, developers will accelerate their project launch schedules, thereby unlocking pent-up demand from first-time buyers, upgraders, and long-term investors. This is expected to lead to a broader recovery in residential transaction volumes. Specifically, the company projects that primary residential transactions in the fourth quarter will climb by approximately 50% quarter-on-quarter, reaching around 5,100 deals, while secondary residential transactions are forecast to rise roughly 10% to approximately 12,700 deals.

Regarding rents and property prices, Ma pointed out that despite rents repeatedly setting new records, current prices remain nearly 16% below the historical peak recorded in 2021, leaving room for a potential catch-up rally. The third quarter is expected to see steady, modest price gains of about 1%, while the fourth quarter is poised to return to a stronger growth trajectory, with gains potentially widening to nearly 4% for the quarter. The full-year outlook for price appreciation remains unchanged at approximately 15%. Ma emphasized that unless unforeseen external shifts occur in interest rates, geopolitical conditions, or financial markets, the fourth quarter could usher in a healthy recovery phase characterized by rising transaction volumes and steady price growth.

On the interest-rate front, Tso Tak-ming, Chief Vice President of mReferral Mortgage Brokerage, noted that the U.S. Consumer Price Index and core CPI both showed moderated increases in July, aligning with market expectations. Should the August inflation data, due for release this week, not present any unexpected spikes, Tso believes the Federal Reserve is likely to hold rates steady again next week. However, he cautioned that the latest U.S. non-farm payroll figures for August, which showed an addition of 162,000 jobs—exceeding forecasts—combined with heightened geopolitical tensions, could pose challenges. The Fed chair remains committed to the 2% long-term inflation target, and if inflation data were to accelerate once more, it could provide support for a rate hike, potentially leading to a "precautionary" rate increase in the fourth quarter. Even if the U.S. raises rates before year-end, Hong Kong banks may not immediately follow suit, or could opt for only a modest upward adjustment to the prime rate (P).