Hong Kong private home prices continue to fall in early 2025: report

Private domestic price index for all classes fell to 284.7 in February 2025, down from 337.4 in 2023.

Hong Kong’s property market remained under pressure in early 2025, with residential prices continuing to decline and office and retail sectors showing further weakness, according to the latest Hong Kong Property Review – Monthly Supplement published by the Rating and Valuation Department.

Private residential prices saw a steady drop. The report noted that the private domestic price index for all classes fell to 284.7 in February 2025, down from 337.4 in 2023.

Rental performance was somewhat more resilient, with the rental index for private domestic units remaining relatively steady at 193.5 in February 2025, compared to 181.1 at the end of 2023.

The office market continued to struggle, especially for Grade A offices in core districts such as Central and Wan Chai.

The rental index for private offices overall fell to 215.0 in February 2025, compared to 227.7 in 2023, and Grade A offices registered a sharper decline.

Retail properties also faced headwinds. The report showed that average retail rents across Hong Kong Island, Kowloon, and the New Territories dropped compared to the same period a year earlier. Meanwhile, retail prices, although volatile, continued to trend lower.

Industrial properties proved to be relatively resilient, with the rental indices for private flatted factories showing only marginal declines. Yields in this sector remained more stable, compared to the sharp compression seen in residential returns.

Transaction activity across both residential and non-residential markets slowed markedly. The review highlighted that "sales and purchase agreement numbers declined" throughout late 2024 and early 2025, as both investors and end-users stayed cautious amid uncertain economic conditions.