Group 1: Economic Outlook - The ongoing U.S. tariffs continue to create uncertainty in the global economy, with expectations that the Federal Reserve may cut interest rates by 0.25% in October to stimulate economic growth [1] - Hong Kong property prices are predicted to improve in the coming months, with an estimated increase of 2% to 3% for the entire year of 2025 and a potential rise of 5% in 2026 [1] Group 2: Real Estate Market Dynamics - The market atmosphere is showing signs of recovery, but high inventory levels are preventing significant decreases in bank lending rates, which remain above rental yields, thus attracting more investors [1] - New property sales are expected to outperform the secondary market, but high inventory levels need to be reduced by 12,000 to 13,000 units for prices to rebound effectively [1] - Monthly transaction volumes are anticipated to hover around 5,000, with total transactions for both new and secondary markets expected to rise to 60,000 to 62,000 units this year [1] Group 3: Rental Market Trends - The Hong Kong government's talent programs have led to a slight increase in the labor force and high-income individuals, providing stable support for residential rental demand [2] - Residential rental prices are projected to remain stable in the coming months, with an expected increase of 4% to 5% this year, potentially reaching historical highs [2] - Rental prices are anticipated to continue rising in 2026, with an additional increase of 3% to 5% expected [2]

Core Viewpoint - The latest "Centaline Property Price Index" reports a value of 129.1 points, reflecting a week-on-week increase of 0.15%, marking two consecutive weeks of growth, and a slight increase of 0.01% compared to four weeks ago. Year-to-date, Hong Kong property prices have risen by 0.76% [1] Group 1: Price Index Trends - The "Centaline Property Confidence Index" stands at 75.2 points, having decreased by 0.7% week-on-week, but remains stable above 75 points for seven consecutive weeks, indicating strong market confidence [1] - The confidence index has been above the average for 42 weeks, suggesting a potential upward trend in Hong Kong property prices [1] - The property price indices for three districts have shown an upward trend for two consecutive weeks, with the highest increase in the Hong Kong Island area, which rose by 0.45% to 134.33 points [1] Group 2: District Performance - Comparing the property price indices to four weeks ago, the Hong Kong Island area increased by 1.02%, while the New Territories remained flat, and the Kowloon area decreased by 0.38% [2] - Year-to-date performance varies across the three districts, with Kowloon and New Territories increasing by 2.12% and 0.3% respectively, while Hong Kong Island has seen a decline of 1.17% [2]

Group 1 - UBS reports that following the Federal Reserve's 25 basis point rate cut and the Hong Kong Monetary Authority's adjustment of the overnight discount rate, Hong Kong banks have lowered the prime rate by 12.5 basis points to 5.125%, aligning with market expectations [1] - After the adjustment, the new mortgage rate for newly built residential properties will decrease from 3.5% to 3.375% [1] - UBS maintains that Hong Kong property prices will remain stable in 2025, with a potential moderate recovery of 0% to 5% in 2026 after inventory digestion [1] Group 2 - Among developers, UBS favors the performance of Sino Land, Henderson Land, and Kerry Properties over New World Development due to the latter's unattractive dividend yield [1] - UBS also prefers Hang Lung Properties, as the decline in HIBOR will reduce its interest expenses [1] - UBS has raised the target price for Sino Land by 14% to HKD 11.2, maintaining a "Buy" rating, reflecting a narrowing of the net asset value discount from 40% to 35%, supported by strong sales at Victoria Harbour and The Pacific Place, and a potential reduction in scrip dividend arrangements [1]

Core Viewpoint - The Central City Leading Index (CCL) has shown a positive trend, indicating a potential recovery in Hong Kong's property market, with various factors contributing to this upward movement [1][2][3]. Group 1: CCL Performance - The latest CCL stands at 138.63 points, reflecting a week-on-week increase of 1.05% [1]. - CCL has fluctuated significantly over the past four weeks, moving between 137 and 138 points, indicating a shift in Hong Kong's property prices [1]. - CCL Mass reached 140.59 points, up 1.34% week-on-week, marking a 53-week high since early August 2024 [3]. - CCL for small units is at 139.08 points, with a week-on-week increase of 1.24% [3]. - CCL for large units is at 136.25 points, showing a slight decline of 0.03% over three consecutive weeks [3]. Group 2: Market Influences - The recent increase in CCL is attributed to favorable market conditions, including a recovering stock market, low interbank rates, and banks offering mortgage incentives [1]. - The Hong Kong government’s decision to terminate the bidding for two industrial sites has also influenced market sentiment [1]. - The CCL has risen 2.57% from the low of 135.16 points recorded in May, indicating a gradual recovery in property prices [2]. Group 3: Regional Price Trends - The CCL Mass for Hong Kong Island increased by 5.13%, the largest rise since June 2019 [3]. - The CCL Mass for New Territories West rose by 1.33%, the highest increase since November 2024 [3]. - Kowloon’s CCL Mass decreased by 0.32%, continuing a downward trend for two weeks [3]. - Overall, the eight major price indices for 2025 show a cumulative increase of 0.72% for CCL, with varying performance across different regions [4].