S&P said, “Hong Kong has become the first major city in China whose property market has bottomed. That could attract developers from mainland China looking to secure new projects”. More aggressive bidding could test the financial discipline of developers as “replenishing land will be crucial for developers to fortify their market position and support long-term growth after a period of muted acquisitions”.
In a sign of just how bullish Morgan Stanley is, one of the risks it identified was the reintroduction of cooling measures. This is unlikely to happen given that prices are recovering from three straight years of decline and inventory levels are still relatively high. Even so, the recovery has gained sufficient traction to move the needle and become a key growth driver for the broader economy, an unthinkable prospect a year ago.
