Hong Kong projected to have high housing volume in 2025

Home prices should stabilise next year.

Hong Kong will have high housing inventories and will likely focus on destocking in the coming years, according to S&P Global Ratings.

"Developers will face further margin pressure because they will be booking residential projects acquired back when land prices were higher,” said S&P Global Ratings credit analyst Edward Chan.

The weighted average earnings before interest, taxes, depreciation, and amortisation margin could edge down further to 34.9% by their fiscal year 2026.

Home prices should stabilise next year after losing nearly 30% from a 2021 peak. S&P also forecasts primary sales to reach 20,000 units in 2025.

However, that compares to 21,000 completed units in inventory as of September 2024. New supply over the next years may exceed 80% of the government's 10-year private home target.

"To control their leverage, rated Hong Kong developers will likely remain selective in land acquisitions," said S&P Global Ratings credit analyst Wilson Ling.