Hong Kong's real estate market enters a new cycle of comprehensive recovery in 2026

In 2025, Hong Kong's property prices will end their continuous decline, with a slight increase of 4.7% for the whole year, laying the foundation for recovery; At the beginning of 2026, the recovery will accelerate, with a significant year-on-year increase in first-hand and second-hand transactions in January. The luxury housing market has performed outstandingly, supported by inventory depletion and loose capital, and the real estate market has entered a new cycle of comprehensive recovery.

The establishment of price inflection point is the core symbol of the real estate market in 2025. After years of continuous decline, the Hong Kong Private Housing Price Index will stop falling and rebound in 2025, with a slight increase of 4.7% for the whole year, which is consistent with the 3.25% increase of the Rating and Valuation Department. The rebound in the second half of the year will be more significant, breaking the pessimistic market expectations and driving up trading, laying the foundation for the recovery in 2026.

The real estate market has shown impressive performance at the beginning of 2026, with a surge in trading enthusiasm. In January, both first-hand and second-hand transactions saw a significant year-on-year increase, with private residential transactions exceeding 3000 for 10 consecutive months and building sales exceeding 7000 for 4 consecutive months, reaching a new high since September 2021. The luxury housing market is leading the recovery, with many developers selling out their first batch of new properties on the same day. Some new properties have already raised prices slightly, confirming the momentum of recovery.

The continuous depletion of inventory provides important support for recovery and alleviates pricing pressure on developers. The remaining volume of new inventory has decreased from about 23000 units at the beginning of 2025 to about 20000 units at the beginning of 2026. Developers have increased their pricing initiative and do not need to lower prices for promotions; The stable performance of the primary market drives the recovery of the secondary market, forming a virtuous cycle and stabilizing the real estate price system.

Loose capital is the core driving force for recovery. Starting from September 2025, the United States and Hong Kong will simultaneously initiate a cycle of interest rate cuts. The basic interest rate in Hong Kong will be lowered by 25 basis points to 4.5%, and the three major note issuing banks will follow suit by lowering their prime rates to reduce the mortgage pressure on homebuyers. In 2026, the loose situation will continue, the cost of real estate will decrease, and the release of rigid and improved demand will be stimulated.

At the same time, the improvement of Hong Kong stocks and the active IPO further strengthen the capital support. Despite short-term fluctuations in the Hong Kong stock market, the overall trend is stable. In 2026, the Hang Seng Index repeatedly rose to 26000 points, highlighting the wealth effect, stimulating the demand for high-end real estate among the wealthy class, promoting the activity of the luxury housing market, and attracting more investors to pay attention to the real estate market and inject incremental funds.

Industry institutions have optimistic expectations for the real estate market, with JPMorgan Chase raising its 2026 housing price increase forecast to 10% -15% and Goldman Sachs raising it to 12%, both believing that the industry has entered an expansion period. The three major positive factors of price turning point, inventory reduction, and loose capital have combined to drive the real estate market out of adjustment, and are expected to continue a steady recovery in the future, with property prices and transaction volume steadily rising.