HONG KONG – Experts reported that Hong Kong’s residential property market is in the process of bottoming out, and they projected a continued rebound this year, driven by a range of favorable market factors.
As the housing market continues to recover, developers have shifted from aggressive discounting strategies toward more assertive pricing.
According to real estate advisory firm Jones Lang LaSalle, the average prices listed in the initial price announcements of new development projects have rebounded 15 percent from the low levels recorded over the past four years. For highly sought-after projects, initial prices and subsequent adjustments have increased up to 30 percent for selected units.
The strongest recovery has been seen in the Kai Tak development area. New residential projects launched in the district in 2023 and 2024 were typically priced at HK$16,000 ($2,041) to HK$20,000 per square foot. This year, the average prices for the new launches there have risen to above HK$23,000 per sq ft for higher-quality units.
“Responding to evolving market conditions, developers have recalibrated their pricing strategies, moving away from the cautious approach seen previously,” said Norry Lee, senior director of projects strategy and consultancy at JLL. “Developers are no longer relying on discounted pricing to drive sales, with some units in popular projects recording double-digit price increases, reflecting strengthened market confidence,” he added.
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However, Lee warned that as interest rates may rise in the second half of this year, the pace of new home price growth is expected to moderate, maintaining a steady upward trend.
The price index of private domestic units, tracked by the Rating and Valuation Department, soared to 316.6 in April, edging up 10.5 percent year-on-year and 0.9 percent month-on-month. Home prices also surged 5.6 percent from January to April this year.
In May, there were 7,138 cases of residential building unit sales and purchase agreements recorded, a nearly 40 percent jump year-on-year. They marked a total consideration of HK$65.5 billion, representing a 70.6 percent year-on-year surge, Land Registry data showed.
In the first five months, there were 7,666 residential property transactions in the Hong Kong Special Administrative Region related to Chinese mainland buyers, jumping about 64 percent. The total consideration was HK$82.2 billion, nearly doubling from the same period last year, real estate broker Midland Realty said.
United States-based S&P Global Ratings forecasts that home price appreciation in Hong Kong will be up to 10 percent in 2026, before moderating to 3 percent in 2027.
“We predict a phase of moderate recovery in Hong Kong’s housing market over the next two years,” said S&P Global Ratings credit analyst Edward Chan. “Hong Kong’s traditional supply-demand imbalances likely will not be as pronounced as they have often been in the past. Supply of new private homes over the next three to four years remains adequate, and subsidized housing supply is also on the rise.”
Patrick Wong, real estate senior industry analyst at Bloomberg Intelligence, predicts that secondary-home prices will rise 19 percent in 2026 and 2027. “The stronger outlook is mainly driven by the renminbi’s rise against the Hong Kong dollar, rising rents and lower mortgage costs. The stronger renminbi boosts mainland buyers’ purchasing power, supporting new-home sales for major developers.”
US investment bank Morgan Stanley has raised its estimate for Hong Kong residential home price growth to 12 percent for 2026, and expects another 5 percent hike next year. This outlook is driven by strong sales, declining inventory levels, falling land supply, and capital and talent inflows from the mainland and the Middle East.
According to US-based credit rating agency Moody’s Ratings, lower interest rates and relaxed mortgage rules since October 2024 have supported housing demand. Additionally, reduced transaction costs, including higher stamp duty concession threshold introduced in the 2025-26 Budget, have further bolstered prices.
Moreover, the potential homebuyer pool from mainland talent has expanded, as many recent arrivals are transitioning to ownership from renting amid rising rents over the past three years, Moody’s added.