Hong Kong's residential property market is reportedly bottoming out, with experts forecasting a significant rebound in home prices. Bloomberg Intelligence's real estate senior industry analyst, Patrick Wong, projects secondary-home prices to increase by 19% across 2026 and 2027. This optimistic outlook is primarily attributed to the appreciation of the renminbi against the Hong Kong dollar, an increase in rental rates, and reduced mortgage costs. A stronger renminbi is expected to enhance the purchasing power of mainland buyers, thereby supporting new-home sales for major developers.
Other financial institutions share a similar positive sentiment. Morgan Stanley has revised its estimate for Hong Kong residential home price growth to 12% for 2026 and anticipates an additional 5% increase the following year. This forecast is underpinned by robust sales, dwindling inventory levels, a decrease in land supply, and an influx of capital and talent from mainland China and the Middle East. S&P Global Ratings, based in the US, predicts home price appreciation of up to 10% in 2026, moderating to 3% in 2027, citing adequate supply of new private and subsidized homes in the coming years.
Supporting this recovery, Moody’s Ratings points to lower interest rates and relaxed mortgage rules introduced since October 2024, which have stimulated housing demand. Furthermore, reduced transaction costs, including a higher stamp duty concession threshold implemented in the 2025-26 Budget, have also contributed to price boosts. The pool of potential homebuyers from mainland China has expanded, as many recent arrivals are transitioning from renting to homeownership due to rising rents over the past three years. J.P. Morgan also raised its 2026 home price growth forecast to 10% to 15%, citing a resilient stock market and strong demand from mainland Chinese buyers.
Market data reinforces these positive trends. The price index for private domestic units, tracked by the Rating and Valuation Department, reached 316.6 in April, marking a 10.5% year-on-year increase and a 0.9% month-on-month rise. Home prices also surged by 5.6% from January to April this year. In May, there were 7,138 residential building unit sales and purchase agreements recorded, representing a nearly 40% year-on-year jump, with a total consideration of HK$65.5 billion. Average prices for new development projects have rebounded 15% from the lows of the past four years, and selected units in highly sought-after projects have seen increases of up to 30%. The Kai Tak development area has shown the strongest recovery, with new residential projects launched this year priced above HK$23,000 per sq ft for higher-quality units, compared to HK$16,000 to HK$20,000 per square foot in 2023 and 2024.
Colliers analysts also anticipate a positive outlook for 2026, expecting Hong Kong home prices to rise by 3% to 5%. They cite interest rate cuts, sustained stock market gains, and demand fueled by talent schemes and non-local students, further contributing to the upward trend. CBRE Hong Kong experts also believe the market has "bottomed out," with small to medium-sized units expected to lead the recovery. This aligns with J.P. Morgan's assessment that the housing market has transitioned from "early-stage recovery" to "expansion," following a more than 10% rebound in home prices since a trough in March 2025.
