HK housing market extends rally

Hong Kong's property market maintained its upward momentum even during the Spring Festival holiday, traditionally a quiet period for transactions, as population inflows and a stronger stock market continued to bolster buying sentiment.

Buoyed by the momentum, international investment banks have revised up their forecasts for home price growth this year.

Data released on Monday by Midland Realty showed its property price index — which tracks major housing estates in the special administrative region — has risen for 13 consecutive weeks, the longest streak of weekly gains since June 2019.

Transactions during the Chinese New Year holiday were resilient, although the festive week is usually marked by subdued activity. Between Feb 16 and Sunday, the 35 large housing estates monitored by the agent recorded 32 deals, more than double the 15 transactions logged during the same holiday last year and up 33.3 percent from the 2024 Chinese New Year break.

The luxury segment led the recovery. As of Thursday, developers had sold 33 new homes priced above HK $100 million ($12.8 million) this year, already more than double the 14 such deals in the first quarter of last year, said Midland Realty. The figure puts high-end housing sales on track to post a record first-quarter high not seen since 2013.

Benny Sham, an analyst at the realty company, said buying power will be further released once the seasonal impact of the Chinese New Year holiday fades and the HKSAR government unveils its 2026-27 Budget on Wednesday.

Sham added that a sustained rally in Hong Kong equities and an active initial public offering pipeline will support housing demand. Expectations of further interest rate cuts by the US Federal Reserve could also spur capital flows into the city's property market, particularly into luxury homes, he said.

JPMorgan said in a report on Sunday that it had raised its forecast for Hong Kong's home price growth this year to 10-15 percent, from a previous 5-7 percent, joining a growing number of global investment houses predicting double-digit gains.

Karl Chan, the bank's head of Hong Kong property research, said the sector had moved from a phase of "early-stage recovery" into "expansion", citing population inflows and a sense of "fear of missing out" after three years of corrections. Chan said he expects prices to rise by a further 5 percent in 2027.

"We believe a strong stock market will continue to push up Hong Kong home prices," Chan said, adding that demand from both Chinese mainland and local buyers will also underpin the recovery.

Goldman Sachs on Friday revised up its forecast for Hong Kong's home price growth this year to 12 percent, from an earlier projection of 5 percent, as it believes favorable immigration policies and lower mortgage rates are expected to release "pent-up demand".

Morgan Stanley expects home prices to rebound by at least 10 percent in 2026. Moreover, it projects office rents in Central — the city's business and commercial hub — to rise by 3 percent, as demand from financial institutions has picked up, supported by an increasingly buoyant stock market.

irisli@chinadailyhk.com