Hong Kong kept its key interest rate unchanged for a sixth consecutive time in lockstep with the Federal Reserve’s overnight decision, with sticky US inflation forcing investors to delay rate cut bets.

Buoyed by the brisk sales of flats following the removal of Hong Kong’s property cooling measures, the city’s developers have this year launched 4,800 new units as of last week, a seven-year high.

Warning over effect on Hong Kong as yen hits 34-year low of 156.82 against US dollar after Bank of Japan held interest rates close to zero.

Wars in the Middle East and Ukraine, and continuing lower US interest rates have burnished gold’s billing as an investment, but it is the unrelenting Chinese demand that is juicing the rally.

Property agents have raised sales forecasts for the year amid project launches at discounted prices, but say a lack of a rate cut could pare those estimates.

China has continued to sell its holdings in US debt as the likelihood of expected interest rate cuts grows more remote and Beijing looks to widen the diversity of its foreign asset pool.

China’s managed currency is seen as an anchor for its regional peers, meaning small moves can have an outsize impact.

‘Foreign investor appetite could not be stronger for Japan at the moment,’ JLL analyst says.

Hong Kong property sales rose to a 10-month high in March, surpassing 5,000 deals a month after the government lifted all property cooling measures, data from the government shows.

The lived-in home-price index fell 1.7 per cent in February versus 1.2 per cent in January, according to the Rating and Valuation Department. Prices have fallen for 10 months in a row, losing 13.7 per cent in value.

Japan overtook China as the biggest private equity market in Asia-Pacific last year, becoming the only country to see an increase in deal activity, according to Bain & Company.

The developer of Belgravia Place says it will launch 7,100 new homes this year, 5 per cent fewer than the 7,655 units offered in 2023. The firm reported flat underlying profit of US$1.2 billion last year.

HSBC, Standard Chartered and BOCHK – the city’s three note-issuing banks – will keep their lending and deposit rates unchanged, meaning borrowers will have to keep waiting for interest relief.

Hong Kong’s monetary authority cautioned borrowers to carefully assess interest-rate risks before buying property as it remains uncertain when the Fed will cut interest rates.

The HKMA has held its base rate at current level after raising it 11 times from March 2022 to July 2023 to the highest level since December 2007.

The US central bank kept rates unchanged on Wednesday, but also stayed the course in its forecast for 3 rate cuts this year.

Japan ended eight years of negative interest rates on Tuesday, but analysts do not expect any direct impact on China, which is prioritising the stability of the yuan over rate cuts.

The commercial property leasing market across most Asia-Pacific markets is improving, except in Hong Kong and mainland China where sentiment is particularly downbeat, according to CBRE.

The move will make loans more costly for consumers and businesses, but banks will be able to earn more money from lending.

Hong Kong’s current property market downturn is cyclical and not structural, with home prices set to decline by as much as 10 per cent this year as elevated interest rates keep demand in check, S&P says

‘China faces considerable domestic challenges, from a sluggish property market to weak consumer sentiment, Wharf says. After a poor result in 2023, more time is needed to revive the property markets, it says.