Cushman & Wakefield: Hong Kong property prices are expected to rise by about 5% next year, and rent increases will slow to 3%

The Zhitong Finance App learned that Deng Shuk-yin, executive director of Dai Deliang and head of the Hong Kong Research Department, said that next year's residential sales volume in Hong Kong is expected to be about the same as this year, with property prices rising within about 5%. Rents have risen a lot this year, and rents will increase to a certain extent in 2026, probably slightly slower than this year, to around 3%. As for the remodeling of student dormitories in hotels, the renovation of hotel properties may take time, and the properties may not all be on the market all at once.

Tang Suk-yin pointed out that due to the continued recovery in turnover, Hong Kong property prices have gradually stabilized since March this year, and have recorded a slight increase since April. According to data from the Hong Kong Differential Assessment Authority, the overall residential property price index recorded a 3.3% increase from March to October. As a result, property prices stopped falling and rebounded 1.8% from the beginning of the year to date, indicating that the property market has bottomed out and gradually emerged from the consolidation period. On the other hand, the residential rent index continues to rise, driven by housing demand from foreign professionals and non-local students. It has recorded a 4% increase since the beginning of the year. Under interest rate cuts, it continues to attract investors to enter the market. Some renters are also considering buying homes instead, which supports both transaction volume and sales prices.

She mentioned that as the Bank of Hong Kong followed the Federal Reserve in lowering interest rates, the property market entry threshold and interest costs were lowered. Coupled with the wealth effects associated with a positive stock market, demand for housing was further released, and the trading atmosphere continued to improve. Since March of this year, the number of residential sales contracts has exceeded 5,000 for 9 consecutive months. It is estimated that the number of residential transactions in the fourth quarter will be about 16,400, up 9% year on year, or about 62,000 total transactions for the year, up 17% year on year. Developers actively promoted inventory removal during the year. First-hand transactions from January to October accounted for about 33% of the total number of residential transactions.

Lai Kin-ming, senior director of the Hong Kong Valuation and Advisory Services Department at Cushman & Wakefield, said that luxury property sales will be a little higher recently, and it is not surprising that it will drive the small and medium-sized market next year. The building replacement year is expected to begin this year, but it is slow. If the financial market is good next year, luxury homes will “run out” first.