Hong Kong's real estate market continues to thrive! The combination of the "four lows" pattern and the explosion of purchasing power

Recently, the Federal Reserve of the United States released its latest interest rate results, which remained unchanged as expected by the market. Although the pace of interest rate cuts has been temporarily postponed, the market generally expects that the United States will continue to cut interest rates in 2026. Coupled with multiple positive factors such as the sustained recovery of the Hong Kong economy and the hovering high of the Hong Kong stock market, funds continue to flow into the real estate market, especially the recent hot sales of the Xisha red market, which has written a "good start" for the real estate market throughout the year. This "early spring" warmth not only fully demonstrates market confidence, but also lays a solid foundation for the development of the real estate market throughout the year.

The direction of the Federal Reserve's monetary policy has always been a key external factor affecting the funding aspect of Hong Kong's real estate market. On the early morning of January 29th Beijing time, the Federal Reserve announced at its first interest rate meeting of 2026 that it would maintain the target range of the federal funds rate at 3.50% -3.75%, consistent with market expectations. The resolution was passed at 10:2, with two officials advocating a 25 basis point rate cut, indicating some internal differences. Although there has been no interest rate cut this time, the market's expectation for a full year rate cut has not changed. A Reuters survey of economists shows that the rate cut cycle may restart as soon as Federal Reserve Chairman Powell steps down in May. Institutions such as CICC also predict that the Federal Reserve is still expected to achieve two rate cuts in 2026, with the first cut possibly postponed until the second quarter. This expectation greatly eased the interest rate pressure on the market, provided a favorable environment for capital inflows into the real estate market, and became an important external support for promoting the recovery of the real estate market.

In addition to external favorable support, the internal economic recovery and market confidence repair in Hong Kong have further activated the purchasing power of the real estate market. As the Hong Kong economy gradually emerges from the adjustment period, the consumer and employment markets steadily improve, and citizens' income expectations rebound, coupled with the wealth effect brought by the high volatility of the Hong Kong stock market, the long pent up demand for home purchases continues to be released, forming a trend of concentrated and explosive purchasing power. At the same time, the supply side of the Hong Kong real estate market presents a "four low" pattern - low inventory, low new supply, low turnover cycle, and low bargaining space. The imbalance between supply and demand is further highlighted, providing solid support for the steady recovery of property prices and allowing the market to continue its upward trend.

The rebound trend of the real estate market has already been clearly confirmed in trading and property price data. Since the beginning of 2025, the real estate market in Hong Kong has shown clear signs of recovery, with continuous increase in trading activity, driving property prices to "bottom out" and gradually emerge from the previous adjustment cycle. The latest data released by the Rating and Valuation Department recently shows that the private residential price index rose by about 0.23% on a monthly basis in December 2025, achieving a continuous seven month increase and creating the longest upward trend in over four years, driving the cumulative rebound of property prices by 3.3% for the whole year of 2025, ending the year-on-year decline of the past three years.

Another core indicator has also shown impressive performance, with the "Meilian Property Price Index" synchronously improving, with a latest reading of 136.51 points. So far this year, it has risen by 1.34%. What is more noteworthy is that the index has achieved a continuous rise for 8 months, setting a record for the longest continuous rise since August 2018. The double index is positive, fully confirming the resilience of the Hong Kong property market recovery and further strengthening the market's optimistic expectations for the property market. Cushman&Wakefield and other institutions also said that Hong Kong's housing market has gone out of the adjustment stage, and the subsequent recovery trend is worth looking forward to.