Hong Kong Property Market Bottom-Fishing Frenzy: Why Are the Wealthy and First-Time Buyers Converging?

The mythical “sunlight” phenomenon at Kowloon City's new development “South Summit” in March 2025 stands as the most telling testament to Hong Kong's property market recovery—181 units drew 7,000 applicants, with 37 contenders vying for each flat. This fever pitch prompted many locals to exclaim: ‘The window for first-time buyers has truly opened.’ More intriguingly, while mainland migrants and local white-collar workers queued overnight for these affordable flats, luxury properties in Repulse Bay and Mid-Levels also saw frequent high-value transactions: Mainland internet tycoons snapped up a standalone villa in Deep Water Bay for HK$480 million, while Zhang Yong acquired a Mid-Levels flat for HK$53.54 million. This convergence of wealthy investors and first-time buyers seeking bargains is reshaping Hong Kong's property landscape.

I. Market Bottom Signals: Shared Opportunities from Entry-Level to Luxury Properties

After three years of adjustment, Hong Kong's property market has clearly bottomed out. The Centaline City Leading Index (CCL) shows prices have fallen nearly 25% from their 2022 peak, with popular entry-level areas like Kowloon City and Northwest New Territories dropping over 20% – essentially returning to 2019 levels. This correction presents an entry point for first-time buyers and a bargain window for affluent investors seeking quality assets.

The most compelling evidence lies in the strength of the essential housing market. In the first eleven months of 2025, transactions for both new and resale private flats priced below HK$4 million exceeded 12,600 units – the highest since 2016 – accounting for 24% of total transactions. Developers' ‘price-for-volume’ strategy has added further momentum: Vanke's Tai Po ‘Shangran’ project launched 58 units priced below HK$4 million, with discounted prices per square foot as low as HK$10,303, triggering 65 times oversubscription and selling out 331 units within four days. For ordinary buyers, such pricing makes ‘mortgage payments cheaper than rent’ a viable prospect – a HK$4.93 million flat incurs monthly mortgage payments of approximately HK$15,900, which is broadly on par with local rents and even lower than some popular estates.

The affluent class, meanwhile, is eyeing valuation recovery opportunities in core district luxury properties. From January to November 2025, 248 second-hand luxury homes priced above HK$50 million changed hands, surging 34.1% year-on-year. Transaction prices in traditional luxury districts like Repulse Bay and Mid-Levels have retreated 20%-25% from their peaks, precisely entering what the wealthy deem a ‘reasonable range’. Century 21 points out that Hong Kong's IPO fundraising volume surged 2.3-fold year-on-year, with substantial capital inflows making luxury properties a ‘capital pool’ for high-net-worth individuals.

II. Targeted Policy Support: Dual Benefits for Different Buyer Segments

Hong Kong's property market policies demonstrate ‘dual-track empowerment,’ addressing both first-time buyers' needs and catering to affluent investors. For first-time buyers, the most tangible benefit in 2025 is the stamp duty adjustment: the threshold for the HK$100 stamp duty rate has risen from HK$3 million to HK$4 million. Purchasing a HK$4 million property now saves HK$60,000 in taxes – equivalent to half a year's salary for an average white-collar worker. Coupled with the Hong Kong Monetary Authority's relaxation of mortgage loan-to-value ratios, properties valued below HK$8 million now qualify for 80% mortgages. This reduces the down payment for a HK$5 million flat from HK$1.5 million to HK$1 million, significantly lowering the entry barrier.

Wealthy individuals have turned their attention to enhancements in the Capital Investment Entrant Scheme, with property reclassified as a qualifying investment category. Acquiring luxury residences not only diversifies assets but also grants residency rights, attracting mainland and foreign high-net-worth individuals in droves. More crucially, Hong Kong's tax advantages—no inheritance tax, no capital gains tax, and free capital flows—make core district luxury properties both a ‘status symbol’ and a ‘safe haven’ for wealthy individuals seeking asset preservation. With total bank deposits reaching HK$19.14 trillion in 2025, substantial savings are accelerating into real estate.

III. Diverging Demand Logic: Convergence of Self-Occupancy and Value Preservation

Though both seek to ‘buy at rock-bottom prices,’ the motivations of first-time buyers and the wealthy diverge significantly, yet converge due to Hong Kong's unique property market dynamics. For first-time buyers, purchasing a home addresses an ‘urgent livelihood necessity’ – Hong Kong's 2.6 million households face a chronic shortage with only 1.2 million private residential units available. New developments like ‘South Summit,’ offering access to Kowloon City's prestigious school catchment (including La Salle Primary School and Maryknoll Convent School), provide a comprehensive ‘residence plus education’ solution. It's no wonder 37 buyers vie for each unit. Many expatriates and young families candidly state: ‘With monthly mortgage payments now comparable to rent, why not invest in your own property?’

For the affluent, the rationale lies in ‘long-term asset allocation considerations.’ The unparalleled resources of Repulse Bay's sea views, Mid-Levels' cultural heritage, and Kowloon Station's transport hub endow luxury residences with ‘inherent resilience against market downturns.’ Amidst 2025's global geopolitical turbulence and stock/bond market volatility, luxury properties' safe-haven value as tangible assets became pronounced. Coupled with rental yields rebounding to 3.56% – the second-highest level in nearly 14 years – their investment appeal grew increasingly evident. Notably, mainland buyers have emerged as a significant force: in the first eleven months of 2025, transactions involving buyers with Mandarin-sounding names reached 12,500 – a record high since statistics began in 1995. In Kai Tak New Area, mainland buyers accounted for half of all purchasers.