Analysts predict a 5% rise in Hong Kong residential property prices in 2026, spurred by demand from buyers from mainland China, potential interest rate cuts, and a decrease in unsold new apartments. Joseph Tsang Hon-ping, the chairman of JLL in Hong Kong, expresses cautious optimism for housing prices in 2026, believing they’ve reached their lowest point.
According to Tsang, there’s an expectation of a 5% rise in capital values, while the value of luxury residences is anticipated to remain generally unchanged. However, luxury rents could experience an increase of up to 5%. This pattern could provide a significant lift to a market that has been in decline since the latter part of 2021.
Cushman & Wakefield also suggests that recent adjustments in taxes and a bounce-back in the Hong Kong stock market could contribute to the stabilization of the city’s residential property sector. Additionally, these elements could help to normalize elevated inventory levels held by developers by the end of the upcoming year.
Government data reveals a significant drop of 28.4% in lived-in home prices in March, compared to their peak in September 2021. However, home sales have shown promising growth, with an increase of more than 20% year on year as reported in November. This surge in sales has resulted in a decrease in unsold inventory.
By the end of the year, the projection is for the unsold stock to be equivalent to over 51 months of supply. This aligns with the average level between the years 2015 and 2021. JLL also anticipates private housing supply to normalize by the end of 2026, requiring nearly 45 months to absorb current stock.
For new property launches, about 30% of buyers hail from mainland China. This figure rises to over 60% for projects in specific areas like Kai Tak and Kowloon Station. In the luxury housing market, which includes units priced at or above HKD100 million (US$12.85 million), mainland Chinese buyers account for more than 90% of purchases.
Some luxury properties, such as a duplex apartment at The Legacy, have achieved exceptionally high selling prices. This apartment reportedly set a new city record, selling for HKD880 million.
There have been signs of improvement in Hong Kong’s residential property market sentiment in recent months, following a roughly 30% price drop from their 2021 peak. Interest rate cuts have aided in stabilizing financing conditions, marking the start of a recovery.
Cushman predicts the number of mainland buyers in Hong Kong to continue rising, as rental prices have reached historic highs. However, Edgar Lai, a senior director at Cushman, believes the share of mainland buyers will not surpass that of local buyers due to capital controls making it challenging to transfer large sums of capital into Hong Kong.
What is the predicted increase in Hong Kong home prices in 2026?
Analysts anticipate a 5% rise in residential property prices in Hong Kong in 2026.
What factors are expected to drive this growth?
The projected growth is expected to come from demand from mainland Chinese buyers, anticipated interest rate cuts, and a reduction in unsold new apartments.
What is the current state of Hong Kong’s residential property market?
Hong Kong’s residential property market has begun to show signs of recovery following a 30% drop in prices from their peak in 2021. The market is showing the first signs of stabilization, supported by interest rate cuts.
