Fed's rate cut to fuel property investment globally, but Hong Kong faces hurdles

Core Viewpoint - The US Federal Reserve's recent interest rate cut is expected to initiate a cycle of policy easing, potentially increasing global property investments, although the impact on mainland China and Hong Kong may be limited due to fundamental and geopolitical challenges [1][5]. Group 1: Interest Rate Cuts and Investment Trends - Analysts predict that the Fed's quarter-point rate reduction will likely lead to a series of further cuts, encouraging capital to flow back into property investments [2]. - The Federal Reserve reduced its target rate by 25 basis points to a range of 4 to 4.25 percent, marking the beginning of a rate-cut cycle anticipated to continue into the next year [5]. - The Hong Kong Monetary Authority followed suit, lowering its base rate by a quarter point to 4.5 percent, the lowest level since December 2022 [7]. Group 2: Market Competitiveness and Investment Focus - JLL's global bid intensity index showed an increase in the third quarter, indicating a resurgence in competitive bidding for property investments after a challenging second quarter [3]. - Investors are currently focusing on various segments, including residential or multi-housing, industrial and logistics, retail, and prime offices in key gateway cities [4]. - Further interest rate cuts are expected to bolster investment activity in commercial property markets by lowering financing costs and the benchmark for institutional investments [6].