Valuer Insights

Business Insights | Hong Kong Residential Insights August 2025

By Valuation & Advisory Services

September 24, 2025

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In this report, we look into Hong Kong residential property market.

Snapshot

 

  1. Both home prices and transaction volumes have risen for consecutive months, market rebound signals more evident

    Hong Kong’s home price index rose to 287.9 in July, marking a 0.42% m-o-m increase and a cumulative gain of 1.05% over four months, reaching its highest level in seven months. Meanwhile, transaction volumes remained robust, with over 5,000 deals recorded monthly for six consecutive months through August, largely driven by strong first-hand sales. A total of 5,291 residential units changed hands in August, a 44.8% YoY increase. Overall, the market is showing strong bottoming signals, suggesting that the upward momentum is likely to persist.

  2. Buying sentiment remained positive towards new projects

    The primary residential market continues to lead activity, supported by robust buyer interest and new project launches. In August, over 200 units were released from developments such as Victoria Voyage Phase 1A, 1B (Kai Tak), Lemont Phase 3 (Tai Po) and 33 Kennedy Road (Mid-levels). Despite high inventory levels, developers have sold over 1,600 primary units monthly since March, easing inventory pressure and reflecting sustained demand and buyer confidence.

  3. Super-luxury market thrived with record-breaking prices

    There are signs of accelerating transactions in the primary luxury residential market. In August, a luxury house at 1 Gough Hill Road, The Peak, featuring 11,450 sq.ft. of saleable area, was sold for HK$1.088 billion (HK$95,000 per sq.ft.), marking the most expensive first-hand transaction in Hong Kong’s property market this year. Besides, CK Asset recently sold a 2,086-sq.ft.-unit at 21 Borrett Road, Mid-Levels, for over HK$125 million (HK$60,211 per sq.ft.) via tender. These transactions underscored continued momentum in Hong Kong’s ultra-prime residential segment, with cash-rich buyers actively pursuing rare, high-end assets.   

  4. Swire unveils The Headland Residences, first Chai Wan new residential project since early 2000s

    Developed in partnership with China Motor Bus on the site of a former bus depot at 99 Sheung On Street, Chai Wan, the project will deliver 850 units and aims to revitalize the Eastern District with a blend of housing and cultural amenities. It is the first new residential supply in Chai Wan and also Swire’s largest residential development in over two decades. In a strategic move, Swire has priced the first batch of units at an average of HK$17,565 per sq.ft., marking the lowest first-hand pricing in the district in 11 years.

  5. Compulsory redevelopment sales resumed amid market recovery signals

    Renewed momentum in the market did not only show in primary sales but also in redevelopment activity. A notable example is New World Development’s successful application for a compulsory sale order for a cluster of aging buildings in Causeway Bay – at 54–76 Percival Street and 5–27 Lee Garden Hill Road – signaling developers’ confidence in long-term asset repositioning. The approved reserve price is HK$2.838 billion, notably below the 2022 market valuation of HK$4.505 billion. Despite the steep markdown, this reflects a broader market shift, with developers actively preparing for a residential market recovery.


Outlook  

  • Despite widespread speculation and anticipation from industry stakeholders, the 2025 Policy Address did not introduce any relaxation measures for the mass residential property market. Nevertheless, interest rate movements continue to exert a significant influencing on market sentiment. Following the U.S. Federal Reserve’s 0.25 percentage points rate cut on September 18, several major banks in Hong Kong lowered their Hong Kong Dollar Prime Rate (P-rate), hence lower effective mortgage rates, with effective dates ranging from September 19 to 22.

  • While challenges such as inventory overhang remain – with the number of unsold homes projected to reach approximately 101,000 units by 2029, according to the Housing Bureau’s July 2025 quarterly projection – the residential sector is showing signs of recovery. Lower borrowing costs, combined with strong stock market performance, are expected to stimulate buyer activity and bolster investment sentiment. Together, these factors are likely to set the stage for a more active and revitalised residential market in the second half of 2025.

 

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