Investment Rating - The report maintains an "Overweight" rating for the real estate development sector and an "Overweight" rating for real estate services [1][6]. Core Insights - The Hong Kong private residential market experienced a rise in both transaction volume and prices in June, with private residential prices increasing for three consecutive months [1][2]. - The report highlights that the market is expected to improve due to factors such as potential appreciation of the Renminbi, spillover effects from the Hong Kong stock market, and a rebound in population [1][2]. - The report suggests that the local developers and commercial operators in Hong Kong are likely to see valuation recovery, particularly companies with ample land reserves and quality commercial assets along the MTR lines [1][6]. Summary by Sections Market Performance - In June, the number of new private residential transactions reached 2,140, up 28% month-on-month, while second-hand transactions totaled 3,605, up 11% month-on-month [1]. - For the first half of the year, new private residential transactions totaled 9,280, down 1.4% year-on-year, while second-hand transactions increased by 8.3% year-on-year to 18,452 [1][2]. Price Trends - The Hong Kong private residential price index stood at 286.7 in June, reflecting a month-on-month increase of 0.03%, marking three consecutive months of price increases [2]. - Rental prices also showed an upward trend, with the rental index rising by 0.31% month-on-month in June, continuing a seven-month streak of increases [2]. Interest Rates and Market Conditions - The one-month HIBOR averaged 0.68% in June, down 78 basis points from May, indicating a significant easing of the high-interest rate pressure that previously suppressed market demand [3]. - The report notes that the "supply exceeds demand" phenomenon continues, creating favorable conditions for first-time homebuyers [3]. Recommendations - The report recommends focusing on MTR Corporation (66 HK) and Link REIT (823 HK), with target prices of HKD 31.90 and HKD 50.59 respectively, both rated as "Overweight" and "Buy" [6][18].