Shares of Hong Kong real estate developers are trading lower on Tuesday, with most names in the sector facing downward pressure during the session. 恒隆地产 (Hang Lung Properties) (00101) slipped 3.04% to HK$6.53, while 新鸿基地产 (Sun Hung Kai Properties) (00016) dropped 2.37% to HK$107. 恒基地产 (Henderson Land Development) (00012) declined 2% to HK$25.42, and 太古地产 (Swire Properties) (01972) fell 1.92% to HK$23.54.

The selloff comes after the US Federal Reserve delivered a 25-basis-point rate hike, prompting the Hong Kong Monetary Authority to raise its base rate by the same margin to 4.25%. The latest dot plot indicates one more rate increase is expected this year. Fed Governor Christopher Waller noted that financial conditions are not yet restrictive enough, suggesting that some policy easing measures should be unwound to better align financial and credit conditions with the central bank's ultimate objectives.

Citi analysts believe Hong Kong's property sector will face short-term valuation pressure stemming from the US interest rate outlook, which could push up investors' required rate of return. However, the impact on fundamentals is expected to remain limited. The bank maintains a constructive view on property prices through 2027, though it anticipates a period of consolidation for the remainder of this year following a 12% rise in prices so far.