Hong Kong's residential transactions hit a 19 month high in December, with policy dividends releasing pent up demand!

The Hong Kong property market has shown significant signs of recovery towards year-end, with residential transaction figures performing impressively. As of 17 December, the number of registered residential property sales in Hong Kong reached 4,268, marking a sharp month-on-month increase of 30.3% compared to November. Projected at the current transaction pace, monthly registrations could surpass 6,600 units – marking the highest monthly volume since May 2024. This demonstrates how the combined policy of ‘withdrawing property cooling measures and lowering interest rates’ continues to drive effective release of pent-up market demand.

This substantial surge in transaction figures owes much to the precision of policy implementation. Hong Kong's recent property market ‘withdrawal of cooling measures’ has lowered entry barriers for homebuyers, particularly benefiting first-time purchasers and those seeking to upgrade their homes. Concurrently, the interest rate reduction policy has further decreased financing costs for property purchases, easing monthly repayment pressures. The combined effect of these dual incentives has significantly boosted market confidence. The data trajectory indicates that policy effects are gradually materialising, with market transaction activity markedly increasing compared to previous periods, breaking the previous downturn in the property market.

Notably, this anticipated 19-month high represents more than a simple increase in transaction volume; it reflects the market's positive response to policy direction and improved expectations for the property market. Previously, Hong Kong's property market demand had been pent up for an extended period due to multiple factors. The implementation of the ‘withdrawing cooling measures + interest rate cuts’ policy has provided a crucial opportunity for this pent-up demand to be released. Examining the transaction structure, essential-need flats and improvement-type residences have become the main drivers of transactions, confirming the policy's supportive role for genuine residential demand.

For Hong Kong's property market, the impressive performance of December transactions carries positive market-guiding significance. On one hand, the rebound in transaction volumes helps alleviate market concerns about a property downturn and stabilises market expectations. On the other hand, increased transaction activity will also drive the recovery of related industrial chains, injecting new vitality into Hong Kong's economy. However, the market's subsequent trajectory still requires attention to the continuity of policies and changes in the overall economic environment. After all, the healthy development of the property market requires the dual safeguards of supply-demand balance and policy stability.

Overall, Hong Kong's residential transactions in December reached a 19-month high, directly reflecting the benefits of policy measures such as the withdrawal of cooling measures and interest rate cuts, while also demonstrating genuine market demand. Looking ahead, as policy effects continue to unfold and market confidence further recovers, Hong Kong's property market is expected to gradually return to a stable trajectory.