The headline of a story in a mass-circulation, Chinese-language daily newspaper asked: Is the property market going crazy again?

The article cited several recent transactions showing that not only prices in the property market's lower- and middle-segments have rebounded, but also the speed at which the properties put up for sale were snapped up by buyers. This is of particular significance because the segments involved were the hardest hit by the latest real-estate downtrend.

Perhaps, the market hasn't gone crazy, yet. But, it has become increasingly clear in the past few months that the market is poised for an upswing. The official property price index rose in May and June, reversing the downward slide in the past few months.

Investment analysts are still uncertain if the down-cycle has run its course in a much shorter time than in the past. They warn that the market has yet to digest the large supply of new apartments due for completion in coming months.

Apparently, confidence, which is a key element in the local property sector, has returned sooner than many people had expected. The repeated assurances from the city's prominent developers, obviously, have helped.

More important, some developers have backed up their words by offering zero-deposit mortgage loans to buyers of their apartments. They wouldn't have done that if they weren't confident that prices would rise, knowing that borrowers would have to refinance their loans in a year's time with bank mortgages.

Besides, several major banks, including HSBC and Bank of China (Hong Kong), have slashed their mortgage rates to lure homes buyers. They have offered eligible borrowers preference rates that are usually reserved for their most credit-worthy customers.

As most investors would know, confidence in the property sector is good for the stock market, in which most major listed companies are either directly or indirectly involved in property investment or financing. On that front, the market has staged a sustained rally in the past few trading days, prompting some stock analysts to ask if the equity market is also going crazy.

(HK Edition 07/19/2016 page9)