Cautious optimism for 2026 follows 16.9% surge in 2025 home sales

High unsold inventory and macroeconomic uncertainty weigh on recovery.

Hong Kong’s residential property market enters 2026 with “cautious optimism,” as high volumes of unsold inventory and lingering macroeconomic uncertainties continue to weigh on its recovery, according to a JLL report.

Analysts remain cautious due to a massive supply pipeline, which is expected to keep the market competitive as developers face pressure to move stock.

A rebound in the stock market drove the shift in 2025, with the Hang Seng Index surging 27.8% and recording a daily average turnover of $249.8b.

JLL notes that the stock market typically leads housing price indices by an average of 2.2 months.

This synchronised movement is largely driven by the “wealth effect,” as approximately 58% of Hong Kong adults are stock investors.

Capital gains from equities often translate into liquidity for tangible assets; consequently, secondary residential transaction volumes rose 16.9% year on year to 42,292 units in 2025.

The luxury segment showed particular strength in December 2025, with transactions valued over $50m seeing a volume increase of 97.5% and a value increase of 58.4% month-on-month.

During the same period, the mass residential capital value index recorded a modest year-on-year increase of 1.4%.

Whilst expectations of interest rate cuts anchor the 2026 outlook, current rates remain steady, with the HSBC best lending rate at 5.0% and average mortgage rates at 3.25%.