Hong Kong home prices continue recovery as analysts forecast 2026 increase of at least 10%
FILE PHOTO: A general view of Two International Finance Centre (IFC), HSBC headquarters and Bank of China in Hong Kong, China July 13, 2021. REUTERS/Tyrone Siu/File Photo
HONG KONG, Feb 25 : Private home prices in Hong Kong rose 0.5 per cent in January, the eighth consecutive month of increase, strengthening signs of a housing recovery as analysts forecast prices to jump at least 10 per cent this year.
Home prices edged higher in January from December on improved economic sentiment, Rating and Valuation Department data showed on Wednesday, following a revised 0.4 per cent increase in December.
Residential prices in Hong Kong, among the world's least affordable cities, climbed 3.7 per cent in 2025, the first increase since they peaked in 2021. Prices have tumbled nearly 30 per cent over the past five years, weighed down by higher mortgage rates, subdued economic prospects and reduced demand as strict COVID-19 policies and national security laws prompted an exodus of professionals.
Over the past week, J.P. Morgan revised up its 2026 home price growth forecast to 10 per cent to 15 per cent, from 5 per cent to 7 per cent previously, citing a resilient stock market, strong demand from mainland Chinese buyers and lower inventory, while Goldman Sachs raised its growth forecast to 12 per cent, from 5 per cent.
Morgan Stanley last month also forecast a 10 per cent rise this year supported by increased investment demand and strong rental trends.
"We believe the housing market has just transitioned from 'early-stage recovery' to 'expansion'," Karl Chan, J.P. Morgan head of Hong Kong property research wrote, citing a more than 10 per cent rebound in home prices since a trough in March 2025.
The official home price index tracks the secondary home market. In the primary market, Chan said developers have raised prices by 4 per cent to 5 per cent in the past few months, and reduced discounts by 5 per cent on average, suggesting a more optimistic outlook.
Developers have also become more active in land auctions. Kerry Properties won a land parcel in eastern Hong Kong Island earlier this month at a price 17 per cent above market estimates.
Hong Kong's Hang Seng Properties Index has gained more than 20 per cent so far this year.
Goldman Sachs last week upgraded Henderson Land and Sino Land to "Buy" on their leverage to the housing upcycle, and downgraded CK Asset to "Neutral" on its smaller exposure to the city's residential sector.
Hong Kong's government has removed curbs on property purchases and relaxed ratios on down payments since 2024 to support the sector - a core pillar of the economy.
Major Hong Kong banks lowered interest rates in October, the fifth cut since September 2024, following easing by the U.S. Federal Reserve.
Hong Kong's monetary policy moves with the U.S. as the city's currency HKD=D3 is pegged to the greenback.
