As the year draws to a close, the property market trend has once again turned to the focal point of the public attention, following the deadly blaze at Wang Fuk Court in Tai Po. Previously, the property market was experiencing a 2% price increase from its low point due to the influx of foreign capital. Consequently, many property KOLs, who had previously predicted that the housing market would fall, have suddenly changed their tune, becoming bullish on the property market in the coming year. This is similar to some investment experts who suddenly ascertained the bullishness of bitcoin after the consistent uprising but then fell silent after the sharp decline in value. These commentators are just following the current narrative. Indeed, those kinds of comments reflected the phenomenon known as FOMO (fear of missing out).
One reason for the expectation of rising property prices was that Hong Kong would follow the US interest rate cut. Nevertheless, the recent quarter-point rate cut by the Federal Reserve, major banks in Hong Kong, such as HSBC, Hang Seng, and Standard Chartered, maintained their prime lending rates unchanged. Therefore, if the Federal Reserve executes three additional interest reductions as expected next year, the chances of Hong Kong fully following suit are exceptionally low. Without rate cuts, the property prices lack a crucial catalyst for further surging.
Following the Tai Po fire, the first round of public sale of “The Grand” in Cheung Sha Wan, launched sales of fifty-three residential units. Only twenty-three units were sold on the first day. These new “nano-sized" apartments were on sale with low total selling prices. But it still has low market appeal to attract enough purchases. On the other hand, New World development ‘s Austin Bohemian sold all 63 units in the first round of sales. Those sales results indicated property market has not fully recovered yet. recovery.
Regarding the secondary market, those 30-year-old buildings which have not undergone major repairs, exposed major defects after the big fire. Buyers are forced to reconsider buying these premises due to concerns about repair costs, construction safety, 
and insurance compensation. Because repairs and insurance costs for older buildings are expected to increase significantly, a downward revision of the valuation is inevitable. In general, the valuation may require a 3-5% downward adjustment.
After the blaze, negative reviews of older high-rise apartments in Hong Kong have surged online in “little red book”-the popular social media platform in China. The comments suggested a possible decline in the second-hand property prices in Hong Kong. Currently, mainland buyers account for about 30% of the property market's purchasing power. To some extent, these negative reviews will have certain impact on the property market.
In addition, HSBC CEO Georges Elhedery stated in an interview that the bank will strengthen its streamlined structure, integrate AI into its operations, and will halve the number of members on its operating committee. HSBC's wave of layoffs will be implemented swiftly, and other industries are facing similar difficulties. Consequently, it will cause Hong Kong's unemployment rate to gradually rise next year. Indeed, rising unemployment will put downward pressure on property prices.
In summary, the property prices of 30 years old or above premises may fall by 2-4%, while second-hand property under 20 years old have a fluctuation of 2%. The first-hand property prices should have 3% appreciation. The rental and sales prices of shops and offices will drop by 3-5%.
