Valuer Insights

Business Insights | Hong Kong Residential Insights June 2026

By Valuation & Advisory Services

June 30, 2026

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Home Buying Activity Begins to Cool

Hong Kong’s residential maintained strong momentum during the first five months of 2026. By May 2026, home prices had risen for 12 consecutive months, while monthly transaction volumes held steady at approximately 6,600 deals. Activity in the primary market was particularly robust, with both April and May each recording over 2,000 transactions. This sustained strength contributed to a year-on-year increase of 46.9% in primary sales over the first five months of the year.

Nonetheless, market sentiment shifted notably heading into June. Housing transaction volumes began to slow following the State Council’s outbound investment decree (Order No. 837). The comprehensive 34-article directive significantly expands regulatory scope and compliance obligations for mainland enterprises, organisations, and—notably—individual residents.

Luxury Residential Market Remained Resilient

Hong Kong’s luxury residential segment remains robust in first five months of 2026, with demand increasingly focused on well-located, high-quality new developments. Developers are demonstrating stronger confidence in both pricing and sales execution, particularly for premium projects on Hong Kong Island.

At the ultra-high-end, market momentum remains resilient in May 2026. Activity in the super-prime segment continues, with both deal volume and transaction value increasing, highlighting sustained interest from high-net-worth buyers.

Outlook

Amid an ongoing market recovery and increasing policy uncertainties, we maintain our forecast of 5%–10% growth in Hong Kong residential property prices in 2026. As prices have already advanced by 7.4% year-to-date, this suggests limited upside for the remainder of the year, with the market likely to enter a consolidation phase as earlier gains are absorbed and price momentum softens.

The recent correction in the Hong Kong stock market is likely to dampen market sentiment, while tighter Chinese regulations on outbound investment may reduce mainland capital flows into the property sector. These combined headwinds are expected to weigh on investment demand and market activity, potentially leading to a decline in transaction volumes in the coming months.

In contrast, rental market fundamentals remain robust. Demand continues to be supported by ongoing talent inflows under various admission schemes, alongside a steady rise in non-local student numbers. Leasing activity is expected to pick up further in the third quarter of 2026, as the summer period traditionally marks the peak season driven by student arrivals and corporate relocations. We expect residential rents to increase by 5% to 8% in 2026, with the potential to reach new record highs.