Policy support shows significant effect, Hong Kong real estate market is expected to usher in a small spring in March

The mainland real estate market, as an important linkage factor affecting the Hong Kong real estate market, is gradually showing its stabilizing effect, laying a good foundation for the recovery of the Hong Kong real estate market. Recently, several provinces and cities in mainland China have launched targeted policy measures such as reducing down payments, lowering interest rates, optimizing purchase and loan restrictions, and issuing housing subsidies, in order to stabilize the expectations of the real estate market and activate housing demand. The policy efforts have entered a new stage with the goal of "stabilizing expectations and shortening adjustment time", which is the core judgment clearly put forward by the Central People's Court in the latest market analysis.

The latest data released by the Central People's Court clearly outlines the adjustment trend and signs of recovery in the mainland real estate market. Data shows that in January 2026, the price of second-hand residential properties in 100 cities across the country was 12905 yuan per square meter (RMB, the same below), a monthly decline of 0.85%. Although still in the adjustment range, the decline narrowed by 0.12 percentage points compared to the previous month, demonstrating the positive effect of policy support and further easing the downward pressure on the market. From the perspective of urban hierarchy, the differentiation trend is obvious but all have improved. In January, the prices of second-hand residential properties in first tier, second tier, third tier, and fourth tier cities fell by 1.14%, 0.87%, and 0.73% respectively on a monthly basis, and the decline narrowed compared to December, indicating that the real estate market adjustment in all tier cities is gradually stabilizing.

It is worth noting that property prices in mainland China are not entirely weak, and the new residential market has already experienced structural growth, becoming an important support for the recovery of the real estate market. According to data from the China Index Institute, the average price of newly built residential properties in 100 cities across the country in January was 17114 yuan per square meter, a monthly increase of 0.18% and a year-on-year increase of 2.52%. High end improvement projects have entered the market in cities such as Chengdu, Shanghai, and Hangzhou, driving structural increases in new housing prices. At the same time, the transaction volume of second-hand houses in core first tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen has gradually recovered. Many homebuyers who were originally wait-and-see have finalized their purchase plans before the Spring Festival, driving the market to heat up temporarily and injecting momentum into the overall real estate market recovery.

The stability and progress of the mainland real estate market are in line with the positive trend of the Hong Kong real estate market, coupled with local favorable factors in Hong Kong, jointly promoting the steady progress of the Hong Kong real estate market towards a "little spring". Recently, there have been multiple positive signals in the Hong Kong real estate market, the most obvious of which is the booming mortgage market. According to data from Zhongyuan Mortgage, there were 7852 registered mortgages for existing properties in Hong Kong in January 2026, an increase of 60.5% compared to the previous month, setting a new high for 31 months since June 2023. This fully reflects the accelerating release of housing demand in the market and the continuous recovery of buyers' confidence in entering the market.

In addition to impressive mortgage data, the long-term positive outlook for the Hong Kong property market has also been widely recognized by institutions. According to Chen Junwei, Director of Hong Kong and Mainland Real Estate at Citibank Research Department, based on historical trends, it is estimated that the current upward cycle of the Hong Kong property market will last for at least 5 to 7 years. Taking into account the cumulative increase of about 15% in property prices in the next two years, it is believed that the property price index will break through the historical high of August 2021 within 5 years. Now is a good time to enter the market and buy properties. Its analysis points out that the core support for the accelerated improvement of the Hong Kong property market is the temporary shortage of land supply. In the past two years, only 10000 units were involved in the supply each year, and in the next two years, only 15000 units were involved each year. However, the number of first-hand transactions can reach 22000 units in one year, and the supply-demand imbalance pattern will continue to support the upward trend of property prices.

In addition, the strong performance of the rental market has also provided important support for the recovery of the Hong Kong real estate market. Data shows that residential rents in Hong Kong have risen by a cumulative 20% over the past three years, with an average annual increase of about 6%. However, property prices have only rebounded by 7% from their low in March last year. Industry insiders generally believe that in the next one or two years, property prices will gradually recover from rental increases, further promoting the improvement of the real estate market. At the same time, the loose liquidity of the Hong Kong stock market, coupled with the undervalued real estate sector and the expectation of marginal improvement in fundamentals, have also brought incremental funds to the Hong Kong property market. According to a research report by Huatai Securities, the period from now until March is a window of resonance between policies and the "little spring", which will help the property market valuation to continue to recover.