Hong Kong and mainland Chinese banks are preparing for a new cross-border payment regime that will make it easier for Hong Kong and Macau homebuyers to transfer the funds they need to purchase property in the Greater Bay Area.

Property deals in Hong Kong surged in January to their highest since August on stepped-up buying amid expectations of stable interest rates and hopes that a government residency scheme will draw more investments into the sector.

The banks’ decisions followed the Hong Kong Monetary Authority (HKMA), which left the city’s base rate at 5.75 per cent hours after the Fed kept its target range unchanged in its first policy move of the year.

Hong Kong banks’ net interest margin – the gap between the rate charged on loans and the interest paid for deposits – widened last year to the fattest in four years at 1.68 per cent, the HKMA’s data showed.

Any signal Fed’s Chair Jerome Powell may choose to send is of critical importance. It all comes down to how Powell and his colleagues have been reading the recent spate of economic data.

Exchange Fund added HK$212.7 billion (US$27.27 billion) last year, a stunning turnaround from the record loss of HK$205.4 billion in 2022. This is the third best annual results on record.

Some platforms have grown in popularity since pandemic, but merchants complain about relatively high transaction fees for e-payment systems, say they prefer cash.

Hong Kong is set to develop a more flexible regime for cryptocurrency exchange-traded funds, even though the US leads in both approval speed and market size, according to industry experts.

Investment in Hong Kong property fell by 28 per cent to HK$37 billion (US$4.73 billion) last year, its lowest level since the 2008 financial crisis, but is expected to rise to HK$50 billion in 2024, Colliers says.

Hong Kong’s decade-long property bull run, stopped in its tracks during the pandemic, plunged into negative territory after the local monetary authority raised interest rates in lockstep with the US Federal Reserve.

Buyers snapped up nearly 60 per cent of 165 units on offer at the Phoenext project in Wong Tai Sin, while shunning more expensive flats at KT Marina.

In 2023, 17 jurisdictions including Hong Kong, the EU, South Korea, Singapore, and the US, tightened cryptocurrency regulations, according to a report by TRM Labs.

Some analysts believe it is the right time to buy as the market is close to bottom, and the 20 per cent decline in property prices from an all-time high offsets the higher mortgage rates. Others see leasing as a viable option.

Experts say there are benefits to Hong Kong regulators’ cautious approach to stablecoin regulation, but some fear it will put off big market players.

The legislative proposal comes as Hong Kong steps up efforts to become a virtual asset and Web3 hub by providing a clear regulatory environment.

The housing market continued to decline, with prices in November falling for the seventh month in a row to their lowest level since February 2017, according to government data.

This initiative shows Hong Kong policymakers’ determination to rebuild investor confidence in virtual assets, following a number of major financial scandals involving cryptocurrencies.

The Hong Kong Monetary Authority (HKMA) is set to launch a pilot programme that will enable customers to use a consent-based and secure way to share their account data with other banks.

Analysts expect the Federal Reserve to start cutting interest rates next year, with one expecting the first salvo in March. Lower rates would benefit Hong Kong’s property and capital markets, and boost the yuan, they said.

Hong Kong may have seen the last of the interest rate hikes in the current tightening cycle, but analysts warn this may not prevent property prices from slipping further.

Paul Chan says deficit expected to be just over HK$100 billion, much higher than HK$57 billion suggested earlier.

HSBC, Hang Seng Bank and Bank of China (Hong Kong) kept their prime rates steady at 5.875 per cent, after the HKMA kept the key interest rate unchanged in lockstep with the Federal Reserve.

The officials are soliciting views from the city’s three note-issuing banks and foreign bankers on how Hong Kong can increase its competitiveness as a financial centre, sources say.

Hong Kong needs to be more proactive in striving for development opportunities and injecting some momentum into its economy, Hong Kong Monetary Authority CEO Eddie Yue tells an economic summit.

About 90 per cent of flats on offer this weekend at Yoho West, a joint project between SHKP and MTR Corp, are expected to be sold, according to agency estimates.

The China branches of Hang Seng Bank and Fubon Bank are also in the first batch of overseas banks to join more than 40 state-owned banks in launching their services on the e-CNY app.