Hong Kong Property Market Shows Signs of Recovery

Hong Kong's property market is showing clear signs of recovery, bolstered by rising home prices and a surge in leasing activity. According to the South China Morning Post, property analysts are optimistic that this gradual recovery will continue into the end of the year, driven by improving sentiment, rising rental yields, and firmer demand in the mass-market segment.

The latest data reflects a positive shift, with mortgage registrations climbing by 7.1 percent in October compared to September, totaling 6,463 transactions, excluding off-plan units. Furthermore, from January to October 2024, the city recorded 52,342 mortgage deals, exceeding the total from the entire previous year by over 9 percent.

Secondary market financing is also on the rise, with secondary transactions increasing by 62 percent over the past six months, with projections indicating a three-year high of 20,600 deals by the end of the year, a 25 percent increase from last year.

Notably, buyers have been particularly active in the lower-priced home segment, especially units valued at HK$4 million or below, partly due to tax relaxations. In fact, 11,938 such transactions were recorded from January to October, surpassing last year's totals and accounting for 37 percent of all secondary sales.

Home prices are also on the upswing, with the Centaline City Leading Index of lived-in home prices reaching 142.49 for the week ending November 16, marking a 3.52 percent increase for the year and hitting a 73-week high.

Additionally, the commercial property sector is showing signs of improvement, particularly in the office leasing market. Analysts suggest that the increase in office leasing activity, combined with a moderate influx of new space, could bode well for this sector in the upcoming year.

According to forecasts from CBRE, the supply of new grade A office space is expected to be lower than what was completed in the past two years, with an estimated net of 3.5 million square feet of new premium office space anticipated for 2026 and 2027.

This is a decrease compared to the total of 4.5 million square feet completed in 2024 and 2025. Colliers projects a similar trend, with a combined 3.04 million square feet of new grade A office supply over the next two years, while JLL estimates around 3.28 million square feet for the same period.

Overall, leasing momentum is on the rise, with CBRE's head of research in Hong Kong, Marcos Chan, predicting a 10 percent year-on-year increase in new leasing volume in 2026, indicating a potential upswing for the commercial property sector as well.