Cici Cao

The local market is poised to see more deals once the United States starts cutting rates, but the outlook for an immediate rally in prices may still be clouded by slower economic momentum.

Developers' inventory stood at nearly 22,000 units at the end of last month, with 14,400 earmarked for sale yet to be put on the market, according to Midland Realty's research.

Midland expects primary-market deals to rebound past the 1,000 mark this month as many projects are up for sale at low prices.

Double Coast in Kai Tak, developed by Wheelock Properties, Henderson Land (0012), China Overseas Land & Investment (0688) and New World (0017), will offer 1,590 units this month.

Another Kai Tak project, KT Marina, is selling 62 units at discounts of up to 38.5 percent, courtesy of K Wah International (0173), Wheelock Properties and China Overseas.

Around 154 units of Novo Land, a Sun Hung Kai Properties (0016) project in Tuen Mun, will go on sale tomorrow.

With the influx of offerings, Centaline Property expects prices to bottom out in the fourth quarter and see a bounce that will offset the whole year's decline.

Centaline chairman Shih Wing-ching said more people will buy property, with US rate cuts being imminent and Hong Kong rents rising for eight consecutive months.

Hong Kong does not share the same supply glut situation in the mainland and has a reasonable supply of flats at the moment, which is "capable of being absorbed," he added.

Morgan Stanley released a report predicting that prices will fall by 8 percent this year, or 30 percent off its high, mainly due to interest rate hikes.

Cushman & Wakefield lowered its forecast for prices this year to a 5 percent drop, citing prudent bank lending and the secondary market losing out to many new, low-priced homes.

OCBC expects prices for the year to fall by up to 6 percent.

The removal of cooling measures has only led to a short-term rebound and banks have also tightened up on mortgage approvals, according to OCBC economist Cindy Keung Ching.

Property prices, according to the latest Midland Property Price Index, have dropped 6 percent this year as of September 9, hitting an eight-year low at 129.31 points, down 12 weeks in a row.

This came as the city saw high unemployment rates in the retail, catering and construction industries, with workers blaming fewer projects, imported labor and Hongkongers moving their consumption habits northbound.

The unemployment rate in the construction industry has hit 16 percent, with 30 percent of salaries lower than last year's, according to a poll conudcted by the Hong Kong Federation of Trade Unions in July.

Furthermore, the economy will likely grow by only 2.3 percent this year due to a stagnant housing market and weak retail and job markets, OCBC said.

China is also suffering a slower-than-expected recovery, which has weakened the economic momentum here.

Its producer price index dropped 1.8 percent in August, much more than forecasts for a 1.4 percent fall, and making it 23 consecutive months that it has slipped. August's plunge was also faster than July's 0.8 percent.

The MSCI Asia Pacific Index, a key Asian stock gauge, fell as much as 1.8 percent, its lowest level in three weeks.

It was weighed down by losses in technology stocks due to concerns over US economic growth.

Developers ready to cash in on US rate cuts