Dah Sing Research released a research report stating to maintain a rating of "In line with the overall market" for the real estate industry, with SHK PPT (00016) and Link REIT (00823) listed as preferred stocks, both given a "buy" rating, with target prices of HKD 103 and HKD 45.05 respectively. Hysan Dev (00014) and Wharf REIC (01997) were also given a "buy" rating, with target prices of HKD 16.1 and HKD 32.8.
The bank stated that the new "Policy Address" continues to introduce loose policies to support the demand in the property market, optimize the New Capital Investment Entrant Scheme by allowing investment in residential properties with transaction prices at or above 50 million Hong Kong dollars. Real estate investment is counted towards the investment total limit of 100 million Hong Kong dollars. Considering the limited transactions in the luxury property market and the 579 applications received in the past six months under the New Capital Investment Entrant Scheme, it is believed that the policy adjustments will have limited impact on the Hong Kong property market. The Policy Address proposes to relax the loan-to-value ratios, described by Dah Sing Research as a positive surprise. However, due to the economic uncertainty, potential buyers are not expected to increase mortgage leverage, hence the impact is also limited.
Dah Sing Research mentioned that the Hong Kong government reiterated the land supply plan in this Policy Address, expressing intentions to expedite the construction of the Northern Metropolis Area. It is expected that a series of relaxed policies might have a positive short-term impact, but the most crucial factors remain the market's confidence recovery and further reduction in interest rates.
