Home prices seen flat for rest of year after 7% rise in 8M

Residential transactions fell from 7,650 in June to 4,019 in August.

Hong Kong residential property prices are expected to remain broadly unchanged for the rest of the year, after rising 7% in the first eight months (8M), according to UOB Kay Hian.

The brokerage maintained its full-year price growth forecast of 7%. 

It said the Rating and Valuation Department's price index had also risen 11% year-on-year (YoY), although residential property transactions have slowed in recent months.

According to Land Registry figures cited in the report, residential transactions fell from 7,650 in June to 4,462 in July and 4,019 in August.

August transactions were down 24% YoY, although total deals for 8M remained 23.2% higher than a year earlier.

“Tighter regulations and higher taxes on overseas funds have weighed on buyers’ sentiment,” UOB Kay Hian said.

Meanwhile, residential rents reached a historical high in August, with the overall rental index rising 4.9% in 8M and 5.3% YoY.

The brokerage also identified rising borrowing costs as a risk, with the one-month Hong Kong Interbank Offered Rate reaching 3.02% on 28 September, its highest level since the end of 2025.

It warned that a potential increase in banks' prime lending rates could immediately raise mortgage rates.

Despite the slowdown in transactions, the city’s property developers recorded improved profit margins and lower debt levels in the first half.

UOB Kay Hian said capital recycling activities helped developers reduce debt, whilst recovering margins pointed to improving conditions in the property market.