2025 Hong Kong Property Market Insights

Hong Kong Property Market Rebounds Amid Global Turbulence

Despite a tumultuous time around the globe, the property market continues to hold firm, with clients still moving forward with transactions at the same pricing as prior to the US' tariff announcements. Now with the 90-day pause in effect and US-China having backed off from the worst of the tariff wars, we are seeing things stabilize and buyers actively back in the market which is driving momentum.     

Q1 2025: A strong start     

Particularly in Luxury residential Sales, Q1 saw demand up 50%* year on year as investors buoyed by the improved stock market, capitalized on softened pricing driven by the Chinese economy, interest rates and distressed inventory.   

Primary market sales** increased by 30% YoY with secondary up 13% YoY further signalling the sector's recovery and stabilization. The primary market was largely driven by volumes in the New Territories, and Kowloon was contributed by notable developments such as Mont Verra (Kowloon Tong), The Knightsbridge (Kai Tak), The Cullinan (Kowloon Station), St. George's Mansions (Ho Man Tin) and Pano Harbour (Kai Tak), a trend we are seeing especially around the GBA (Greater Bay Area).  

Habitat had a record Q1 up 30% YoY with buyers targeting Mid-Levels apartments in prime buildings and houses on the Southside.           

Sales transacting despite Global context     

We continue to have transactions go through at the same pricing prior to the US tariffs announcement, re-affirming Buyer's acknowledgement that market pricing is better than it's ever been. Sentiment indicates we are at the bottom or on the way out and expect prices to trend upwards in the next 2-3 years.

There are a raft of smart deals to be had with many vendors looking to exit the market quickly, and hence are willing to trade at or below market/bank valuation.   We are still seeing a level of distress from some vendors in the secondary market who have exposure to commercial property holdings and are having to sell residential assets often at a substantial discount to where they purchased.

We are seeing a lot of HK Permanent Residents returning to re-establish residency and their tax base, especially from the UK and Singapore. Most are looking to be based here long term and taking the opportunity to buy. 

Mainlanders continue to be the driving force, taking advantage of the Talent and CIES schemes. They are highly motivated, drawn to Hong Kong's attractive lifestyle and schooling options and we expect this trend to increase momentum, regardless of the tariff wars. Our client feedback reaffirms this, showing no signs of slowing down despite the global crosswinds.

Buyers are taking advantage of lower prices, combined with higher gearing levels and interest rates which are back at close to 3.5%, hence making sense for many to buy again rather than stay in rental properties. 

Robust Leasing market  

The leasing market in Hong Kong property remains highly competitive, with new listings going quickly so we expect rental rates to move upwards.    

Many landmark blocks have full occupancy especially in Central Mid-Levels and Repulse Bay, which will only put further upward pressure on rentals over 2H 2025 into 2026.  

There continues to be strong demand in Hong Kong Island, particularly at the high end.  We have seen here at Habitat a 40% year on year increase of inbound expat arrivals from Singapore, UK, US, Australia and Europe, in addition to an abundance of local moves.   

There is still a Covid-lag whereby many expats who relocated to Singapore, Tokyo and London during the pandemic, had to delay their return due to the tight availability of school places which still prevails.   

The Southside remains incredibly popular with both new arrivals and local moves, with waitlists at 101/109 Repulse Bay Road, 127 Repulse Bay Road and The Manhattan. Central Mid-Levels has the same demand levels with buildings such as Branksome Grande, Aigburth and Queen's Garden with wait lists or high occupancy levels. 

Market Opportunity

All this, on top of the fact the Hong Kong economy expanded 3.1% in the first quarter# will only be additive to the property market sentiment and momentum.

The Habitat team is here ready to guide you through the dynamics and myriad of opportunities currently in the Hong Kong property market, to help you achieve your property goals.  Please reach out anytime on WhatsApp 9082 9069 or info@habitat-property.com.

Source:

*SCMP March 31, 2025  

**CBRE March 30, 2025 

#SCMP May 16, 2025