Written by 
Cici Cao
Private home prices rebounded slightly in October from the month before amid reduced interest rates and supportive policy from authorities, ending a five-month fall.
However, analysts are divided about the market outlook.
The latest Rating and Valuation Department figures showed the October index for private housing rose 0.6 percent to 290.1, but still 6.8 percent lower than a year ago.
Flats smaller than 40 square meters saw a monthly rebound of 0.46 percent in prices. Homes between 40 and 69.9 sqm performed better during the month, up by 0.89 percent.
Bigger homes of 70 to 99.9 sqm recorded the slightest growth of 0.04 percent.
The value of luxury units bigger than 100 sqm also rose 0.19 percent in October though still 5.7 percent below the April peak this year.
Louis Chan Wing-kit, the Asia Pacific vice chairman of Centaline’s residential division, attributed the rebound to US interest rate cuts in mid-September and policy support announced by Beijing and Hong Kong.
However, the October rental index retreated 0.3 percent, the first decline in eight months. The index has increased by 4.78 percent so far this year, outperforming property prices.
Midland Realty chief analyst Buggle Lau Ka-fai said the drop – the first time since February – marked the end of the peak leasing season. It hit a five-year high in September.
Looking ahead, Chan maintained that home prices would increase 3 percent in the fourth quarter although 1,000 new homes are due to be sold this month.
Chan urged the government to introduce more measures to stimulate the economy in the face of US-China tensions.
Chan’s optimistic outlook came as Knight Frank projected a 7-percent fall for the year, with a clear rebound coming in the second half of 2025 at the earliest.
Knight Frank anticipated a home price increase of 5 percent next year on the assumption that the US keep the current pace of interest rate cuts.
It believes rental demand would drive rents up by 5 percent this year.
UBS said US rate cuts would not significantly boost the city’s property market as it is mainly influenced by the mainland economy.
UBS was not “very optimistic” about the property sector, citing the US tariff threat, though there may be an increase in transactions.
The US is expected to impose new tariffs on Chinese imports by stages from 2025 to 2026, from 20 percent at present to 40 percent in the second half next year, which will lower China’s economic growth by 0.7 to 1 percent.
The bank is also cautious about Hong Kong’s office market due to the high vacancies in premium office buildings under pressure from the work-from-home trend.
It is a global issue, said Eva Lee Chi-wing, UBS Global Wealth Management’s Greater China Equities head.
cici.cao@singtaonewscorp.com