Hong Kong's property market is displaying a solid and consistent recovery, according to a senior executive at Midland Holdings Ltd (HK: 01200). The company's Group Chief Executive Officer and Executive Director of Midland Realty, Ma Tai-Yeung, noted that both the government's inaugural five-year blueprint and the latest Policy Address refrained from heavy-handed measures targeting private residential property. This approach suggests the administration perceives the sector as having entered a healthy recovery trajectory, thereby opting for a less interventionist stance to let the market self-correct.

Ma expressed confidence that the current momentum of the city's property revival is robust, asserting that short-term fluctuations in interest rates are unlikely to significantly impact medium-to-long-term prices. This optimism is underpinned by a strengthening economy, ample liquidity, rising rents, population growth, and shrinking inventory levels. Consequently, the firm is maintaining its projection of a 15% increase in property prices for the entire year. However, it remains prudent to monitor the US Federal Reserve's stance on rate movements, particularly the scale and speed of any future hikes.

Addressing the recent monetary policy decision, Ma pointed out that the Fed's quarter-point rate hike marks the first since July 2023. Given that Hong Kong's rates have historically not moved in perfect lockstep with the US, demonstrating a pattern of "slow rises and fast cuts," local banks, as anticipated, refrained from immediately following suit. Nevertheless, there is potential for another US rate increase before the year's end, which could trigger a corresponding adjustment in Hong Kong's borrowing costs.

Apart from interest rates, housing policy remains a critical determinant of market trends. Ma elaborated that rates are only one of several elements influencing the sector. Throughout this year, Hong Kong's interest rate environment has been largely stable, with the mReferral Mortgage Rate Index (MMI) hovering within a narrow band between 3.12% and 3.27% over the past eight months. Even as the market braced for US rate hikes, the local property scene has gradually emerged from its consolidation phase, with a noticeable uptick in residential transactions.

Data from the Primary Residential Sales Information Network and market intelligence reveals that primary market sales volumes for the first 16 days of September have already exceeded 790 units. This figure more than doubles the 379 units recorded during the same period in August and represents over 70% of the total volume seen in all of August, which stood at nearly 1,100 units. With several new project launches in the pipeline, monthly primary sales are expected to reach approximately 1,500 units, marking a four-month high.

Ma highlighted the exceptional performance of the ultra-luxury segment, underscoring strong confidence among high-net-worth individuals in Hong Kong's property market. In just the first 16 days of September, 22 primary transactions valued above HK$100 million were recorded, exceeding the 15 deals witnessed in the whole of August by more than 46% and setting an eight-month high. Cumulatively, the year-to-date (up to September 16) tally for transactions over HK$100 million stands at 129 units, a figure that not only surpasses last year's total of 101 but also marks the highest level since the implementation of the Residential Properties (First-hand Sales) Ordinance in 2013.

Amid geopolitical uncertainties, Hong Kong's status as an international financial centre continues to attract active capital markets. The expansion of high-value financial institutions is generating wealth effects, while the housing demand from high-income talent remains strong. These fundamental factors are expected to provide sustained support to the luxury property market going forward.