The linked exchange rate mechanism between the Hong Kong Dollar and the US Dollar meant Hong Kong witnessed a prolonged period of historically low interest rates in recent years following the Global Financial Crisis. This helped strengthen property investment demand in Hong Kong.
Investment demand from Mainland Chinese individuals, companies and institutions has surged during the same period. Strong investment demand and the low cost of financing backed by limited supply pushed property prices to new highs.
The increase in U.S. interest rates in December 2015 has triggered concerns among investors over the outlook for the Hong Kong real estate market. This special report by CBRE Research benchmarks historical interest rate hikes and property cycles; analyses the key factors that could affect pricing levels; and explains why we think the Hong Kong property market will experience a soft landing.
Published: 11 January 2016
By: CBRE Research Hong Kong