Hongkonger Katie Chan was hoping to buy a flat to live in, and although the 37-year-old accountant was in no rush, the potential longer pause in interest rate cuts could delay her decision.
For Chan, the ideal mortgage would be if the one-month Hong Kong interbank offered rate (Hibor) fell below 1.95 per cent, but this year the key driver for local mortgage costs and corporate borrowing rates had only dropped to as low as 2.02 per cent, according to data tracked by the Hong Kong Association of Banks.
“I may only make the purchase next year and the interest rate may well be lower at that time,” she said.
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Chan’s plans may not be significantly affected by a slower reduction in interest rates, but the city’s property market could see some impact, albeit a limited one, according to analysts.
In fact, a general sentiment among homebuyers to adopt a wait-and-see approach amid rising geopolitical uncertainties could dampen the recovery in the sector.
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On Thursday, the US Federal Reserve kept its target rate in the range of 3.5 per cent to 3.75 per cent, after the second meeting of the Federal Open Market Committee (FOMC) this year.
