Hong Kong property shares rally as Morgan Stanley feeds optimism

[HONG KONG] Hong Kong property shares rallied, leading gains in the broader market along with technology stocks, after Morgan Stanley boosted its forecast for home prices.

A gauge of builders jumped as much as 2.7 per cent on Monday (May 4) and led the Hang Seng Index over the past month.

Henderson Land Development climbed as much as 6 per cent after Morgan Stanley raised the stock to overweight from neutral and lifted its price target to HK$37 from HK$33, saying the developer stands to be a beneficiary of home price heading higher while interest rates are set to decline.

Hong Kong’s property market has been showing signs of a revival after after a years-long slump, with rising rents and home prices, as well as strong interest at new developments coming to the market.

Morgan Stanley raised its estimate for home price growth 12 per cent this year from 10 per cent, and expects another 5 per cent in 2027.

“We have turned more bullish, driven by strong sell-though, rising average selling prices at subsequent launched phases, declining inventory levels, and falling land supply,” a group of HSBC analysts wrote in a note.

SEE ALSO

Light at last for Hong Kong’s Central office market after seven-year slump

Hong Kong developers are sceptical about ambitious tech hub

Hong Kong’s small builder debt woes mount despite property rally

HK’s top developer gets HK$20 billion loan at multi-year low rate

Hong Kong bank tries to sell mansion it bought at huge discount

Sold-out project marks turnaround for Hong Kong’s developers

More

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

They added: “We see tailwinds from capital and talent coming from the Middle East and mainland.”

The analysts have turned more positive on the office and retail segments as well, with better-than-expected recovery seen in fundamentals, according to the note. BLOOMBERG