Hong Kong's residential property prices have reached a turning point after three years of decline. Lower interest rates and reduced inventory have driven an improvement in market sentiment, with annual price increases recorded for the first time since 2021 throughout 2025.
Data released on Wednesday by the Rating and Valuation Department of the Hong Kong Government showed that private residential property prices rose by 3.3% in 2025. In December, prices increased by 0.2% month-on-month, marking the seventh consecutive month of growth, following a revised increase of 1.1% in November.
This shift marks a potential bottoming out of Hong Kong’s real estate market. Over the past three years, high mortgage rates and weak economic prospects led to a loss of professionals, causing property prices in one of the world’s least affordable cities to fall nearly 30% from their 2021 peak.
Since 2024, Hong Kong authorities have introduced a series of stimulus measures, including lifting purchase restrictions and relaxing down payment requirements, in an effort to support this core pillar of the economy.
Seven consecutive months of month-on-month increases
Official data reflects price dynamics in the secondary market. Data from the Rating and Valuation Department shows that property prices have recorded positive month-on-month growth for seven consecutive months since June 2024, indicating steady market recovery.
In the primary market, developers adopted discount strategies to stimulate sales of new properties, which to some extent suppressed prices in the secondary market. Stable transaction volumes provided price support.
Monetary policy shift provides momentum
Major banks in Hong Kong cut interest rates in October 2024, marking the fifth rate cut since September 2024, following the easing of monetary policy by the U.S. Federal Reserve. Due to the Hong Kong dollar’s peg to the U.S. dollar, Hong Kong’s monetary policy remains aligned with that of the United States.
The downward interest rate cycle has lowered financing costs for homebuyers, becoming one of the key factors driving the rebound in property prices. A decline in inventory levels has supported prices from the supply side.
The market outlook remains cautiously optimistic.
Analysts believe that Hong Kong's real estate market is currently in the bottoming-out phase, but this year's trend will depend on multiple factors, including the pace of interest rate cuts and stock market performance.
Eddie Kwok, Executive Director of CBRE Hong Kong, forecasts a 3-5% increase in property prices by 2026. He noted that last year’s stock market rally created a wealth effect, encouraging more buyers to enter the market, while strong developer interest in this month’s land tender indicates improved market confidence.
Morgan Stanley analyst Praveen Choudhary predicts a 10% rise in property prices by 2026, citing increased investment demand and robust rental trends, supported by a continuous inflow of talent and students from mainland China.
Editor/Doris
