Buyers turn to private homes as premiums decline

Subsidised sale flats may still hinder recovery.

Buyers are increasingly turning to the private residential market as the price premium of private homes over Subsidised Sale Flats (SSFs) continues to narrow, according to JLL's latest Hong Kong Residential Sales Market Dynamics.

"As private home prices continue to soften, the shrinking premium of private flats over SSFs has prompted more buyers to enter the private market directly. This trend is evident across multiple districts,” said Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL. 

“For example, in Kai Tak, the price premium of private flats over SSFs dropped by 19.2% year-on-year to HKD 9,020 per sq ft in 2025. The decline was even sharper in Kwun Tong, where the premium dropped 29% to HKD 7,585 per sq ft." 

According to the Hong Kong Housing Authority, the Home Ownership Scheme received approximately 106,000 applications in 2024, with an oversubscription rate of 14 times, the lowest since the scheme relaunched in 2014.

However, the surge in SSF supply in the long term will still put pressure on the private sector and slow the overall property market recovery.

By 2029, the supply of subsidised sale flats is projected to reach 17,620 units, exceeding the 15,000 private residential units completed during the same period and potentially exerting downward pressure on the private market.

The North District and Kowloon City District are likely to be hardest hit, with 11,500 and 8,100 new SSFs expected between 2025 and 2029, respectively.

In addition to supply, the private home market is also facing pressure on SSF prices and resale conditions. If SSF discounts return to the 49% level seen in 2023, this will attract more price-sensitive buyers, and resale-eligible SSFs will also intensify competition for private homes.