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<Research>CLSA Predicts Limited Impact from Relaxed Max. LTV Ratio, Another 5% Drop in Property Prices Before Bottoming in 2H25
Recommend 11 Positive 16 Negative 5 |
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Chief Executive John Lee announced the 2024 Policy Address yesterday (16th), unveiling a series of economic stimulus measures. CLSA released a research report welcoming the relaxation of the maximum loan-to-value (LTV) ratio and talent attraction measures, which are anticipated to stimulate investment demand. However, the impact of those measures on the property market will likely be limited, given that the more aggressive easing in February only provided a temporary boost. As rental yields remain below actual mortgage rates and US Treasury yields, investors are unlikely to return to the property market. The broker also noted that in the currently sluggish economy, high-interest rate environment, and still high inventory levels of residential units, developers tend to adopt low-price strategies to clear stock. As a result, the broker currently estimates that property prices will drop another 5% before bottoming in 2H25. The broker gave SHK PPT (00016.HK) an Underperform rating with a TP of $70.5. Its top picks were SWIREPROPERTIES (01972.HK) and LINK REIT (00823.HK), both rated Outperform with a TP of $18 and $45, respectively. AAStocks Financial News |
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