How markedly the tide has turned in Hong Kong’s residential property market in 2025, as private home prices registered their first annual increase since 2021, reversing four consecutive years of declines and signaling a tentative cyclical inflection.
Private residential property prices rose 3.3% in 2025, with the official price index for private domestic homes up 3.25% year-on-year, ending a prolonged downcycle during which real home prices had fallen nearly 28% below 2021 levels after continuous year-on-year declines from February 2022 to August 2025.
Private home prices rose 3.3% in 2025, breaking a four-year downturn and signaling a tentative market inflection
The recovery gathered momentum in the second half of the year, as the residential property price index was 1.13% higher in October 2025 compared with a year earlier, marking the second consecutive month of annual gains. House prices climbed 2.15% in the three months to October, or 1.69% after adjusting for inflation.
By December, second-hand home prices were still edging higher, up 0.23% month-on-month, reinforcing perceptions of a soft landing rather than a sharp rebound.
Market participants largely attributed the inflection to a confluence of policy and macroeconomic drivers, including three interest rate cuts by the Hong Kong Monetary Authority in 2025, government support measures such as stamp duty easing, and a visible reduction in unsold inventories in the second half. Falling mortgage rates improved affordability metrics and buyer sentiment. This policy-driven backdrop has underpinned market confidence and reinforced the sense that the recovery is on a more sustainable footing.
An influx of talent and mainland Chinese purchasers, particularly in the luxury segment, added incremental demand. Record rents and inflows of people further bolstered the positive outlook for the housing market.
Transaction activity corroborated the turn in prices. Total property transactions rose 20.3% year-on-year to 51,361 units in the first ten months of 2025, with primary market sales up 25.5% to 16,979 units and secondary market deals increasing 17.9% to 34,382 units.
Transaction values mirrored this expansion, as secondary market considerations advanced 12% year-on-year to HK$238.94 billion. This contributed to an 11.8% rise in total transaction value to HK$549.24 billion over the same period.
This market normalization unfolded against an improving economic backdrop. Real GDP expanded 0.7% quarter-on-quarter in the third quarter of 2025, and the government revised its full-year real GDP growth forecast to 3.2%. Amid global economic uncertainty, investors across Asia-Pacific have increasingly sought stable markets with transparent regulatory frameworks and proactive governance.
Forecasts for 2026 now generally envisage further property price appreciation in the range of 3% to 10%, with projections of around 5% from Bloomberg Intelligence and 6% to 8% from Ricacorp Properties.
These projections are premised on expectations of lower interest rates, continued economic stabilization, and sustained inflows of residents and capital.
