Hong Kong’s residential sales market maintained strong momentum through the first two months of 2026, transitioning from 2025 recovery into a period of outright growth. February marked the ninth consecutive month of price increases, with the Rating and Valuation Department (RVD) reported a 1.6% month-on-month rise in private home prices, bringing year-to-date gains to approximately 3.5–4.3%. This market update examines the latest sales volume, evolving purchaser profiles, and emerging trends that are reshaping the market outlook for 2026.
Sales Volumes: A Strong Start
Total transactions for January and February tracked 18–22% higher year-on-year, with approximately 12,500–13,500 sale-and-purchase agreements recorded.
Primary Market
Developers capitalised on improved sentiment, reaching 4,109 units in February alone—a 146% rise compared to early 2025. Several high-profile developments in Kai Tak and Yau Tong achieved near sell-out rates within weeks, contributing to a primary market share of around 33-35% of total volume, well above the long-term average.
Secondary Market
Transactions were even more impressive, hitting 8,229 units in February, pushing the two-month total up 59.5% year-to-date. Ten major housing estates monitored by major agencies recorded their busiest start in four years, with individual estates in Tseung Kwan O and Sha Tin posting over 150 deals each in February.
Overall transaction value for the period exceeded HK$85 billion, reflecting the dual impact of higher volumes and the gradual price uplift.
Supply Constraints & Financing
Supply dynamics have become increasingly supportive. Following a peak in 2024, private residential completions fell to 18,450 units in 2025. Forecasts suggest a further decline to 16,980 units in 2026, a cumulative 35% drop from two years prior. Unsold primary inventory has contracted to 11,250 units—the lowest in three years, creating a tighter environment which rewarding well-priced new launches and quality second-hand stock.
While seasonal factors saw mortgage drawdowns totalled HK$16.4 billion in February, the volume of new applications remains healthy at 8,125, supported by stable mortgage rates between 3.25–3.5%.
Purchaser Profiles: Local Anchor, Mainland Luxury
The buyer base has broadened significantly:
Local Buyers
Accounted for 65–70% of February deals, primarily anchor the mass and mid-market segments (properties below HK$15 million). First-time buyers and young families remain active, supported by the lingering benefits of 2025 stamp-duty adjustments and stable mortgage rates. Also, demand was bolstered by Top Talent Pass Scheme participants and returning residents.
Mainland Investors
Dominated the ultra-luxury tier, representing roughly 80% of transactions above HK$100 million. High-net-worth buyers deployed over HK$28 billion in the first two months, targeting trophy assets in The Peak and Southside.
Yield Seekers
Corporate and individual investors have risen modestly to 10–12% of transactions, reflecting attractive yield carry as rents continue to climb. With the RVD rental index hitting fresh highs in February and year-to-date growth of 4-5%, this encourages more buy-to-let strategies, particularly in university-adjacent districts.
Key Trends and 2026 Outlook
Market confidence has been further strengthen by the "wealth effect" from a resilient Hang Seng Index and stabilised interest rates (1-month HIBOR around 2.9–3.1%). Despite a Budget announcement raising stamp duty on properties over HK$100 million to 6.5%, the luxury segment remains insensitive to the cost, focusing instead on scarcity.
Major agencies (CBRE, JLL, Knight Frank) have upgraded their 2026 outlooks:
- Transaction Volumes: Projected at 65,000–71,000 units (up 10% from 2025).
- Price Growth: Expected between 5–10% for the full year, with mass-market residential likely to outpace the luxury sector.
- Rentals: Growth is forecast to moderate to 2–3% after a rapid 2025 climb.
February 2026 has solidified the narrative of a maturing upcycle. As price appreciation sustains and transaction volumes expand, the market is successfully transitioning from a post-downturn recovery into a phase of disciplined, balanced growth. For discerning investors, these early-year indicators suggest that strategic engagement within high-conviction segments remains poised to yield superior returns throughout the remainder of 2026.
