THE LONG VIEW

INTELLIGENCE BRIEFING: Hong Kong Property Bear Market Shows Signs of Structural Exit Executive Summary: Hong Kong's residential property market exhibits growing evidence of exiting a four-year bear cycle, supported by technical breakouts, improving market breadth, and favorable financial conditions. Key indicators suggest a shift toward a new growth phase, though geopolitical and monetary risks require monitoring. Primary Indicators: - CCL index reached 153.68, a 2.5-year high - Private residential price index crossed above 34-month moving average after 48 months below - 52-week new highs minus lows ratio surged to 25.9%, highest since bear market began - Over 95% of estates now trade above 50-week moving average - Rent yield spread (rental yield minus 3-month HIBOR) has remained positive since May 2023 Recommended Actions: - Monitor sustained holding above 34-month moving average for confirmation - Track rent yield spread and interbank rates for affordability signals - Assess impact of geopolitical risks on capital flows - Evaluate transaction volume and credit expansion as leading indicators - Consider portfolio rebalancing toward property assets if macro conditions hold Risk Assessment: While the market demonstrates convincing signs of structural recovery, unseen storms may still loom beneath the surface. The current calm could be disrupted by external shocks — particularly if geopolitical tensions escalate or global monetary policy remains tighter for longer. History whispers warnings: not every rally births a bull. Yet the data, cold and clear, suggests we are no longer drifting in darkness. The cycle has turned — but vigilance must not sleep. —Sir Edward Pemberton