The Rating and Valuation Department released the latest home price index. Eddie Kwok, Executive Director, Valuation & Advisory Services, CBRE Hong Kong says:
- Residential property prices have increased by 7.9% in the first half of this year. The rise was mainly driven by small and medium-sized units, particularly those below 700 sq. ft. In contrast, larger units recorded more modest growth. Since the market bottomed out last year, smaller units have consistently outperformed. Developers have also been actively launching small and medium-sized units to meet market demand.
- As home prices have already accumulated a notable gain, further upside is expected to be limited in the short term. The residential market is likely to enter a consolidation phase in the coming months. Recent corrections in the Hong Kong stock market may affect investor sentiment, while controls on outbound investment from Mainland China could reduce the flow of Mainland capital into Hong Kong’s property market. Taken together, these factors are expected to dampen investment demand and may lead to a decline in residential transaction volumes over the next few months.
- As for the rental market, residential rents increased by 2.6% in the first half of the year. Ongoing government initiatives to attract talent, together with the steady growth in the number of non-local students, continue to support rental demand. Leasing activity is expected to become even more active in the third quarter of 2026, as summer is traditionally the peak season for student arrivals and corporate relocations. Rental growth in the second half of the year is expected to exceed that of the first half. Overall, residential rents are forecast to rise by 5% to 8% in 2026 and could potentially reach a new record high.