Demand for below-HKD 4 million-properties improves following stamp duty reduction

• The residential transaction volume fell 19.2% q-o-q in Q1, with March hitting a four-month high, after the HKD 100 stamp duty threshold rose from HKD 3 million to 4 million. Mass residential capital values edged downward by a marginal 0.1% q-o-q in Q1.
• Market sentiment continued to improve in Q1, driven by the competitive pricing of new project launches. Eight Southpark in Ma Tau Kok sold all 181 units launched on the first day of the project launch.

Two residential sites were successfully tendered in Q1 2025

• In Q4 2024, 377 luxury residential units were completed. These included 129 units at Pano Harbour in Kai Tak, 103 units at 188 Lung Cheung Road in Kowloon Tong, and 86 units at Cullinan Sky in Kai Tak. A total of 574 luxury residential units were completed in FY2024.
• SHKP secured two residential sites in Q1 2025: Shatin’s STTL 651 for HKD 606 million (HKD 3,128 per sq ft, A.V.) in January and Tung Chung’s TCTL 55 for HKD 602 million (HKD 1,501 per sq ft, A.V.) in February.

Luxury rents regain momentum on the back of continued talent inflow

• Luxury residential rents rose by 0.8% q-o-q in Q1. The inflow of non-local talent continues to support demand in the luxury leasing market, with the leasing transaction volume in the luxury market remaining stable q-o-q in Q1.
• Investment activity in the high-end segment remained strong. In Q1, the transaction volume for properties valued at or above HKD 50 million increased by 70.5% y-o-y. Meanwhile, luxury residential capital values declined by 1.5% q-o-q in Q1.

Outlook: Slowing economic growth and negative wealth effect to dampen property values

• The ongoing trade war risks stifling economic growth and stock market decline, pressuring residential property values. We expect mass and luxury residential capital values to drop by about 5% in 2025.
• Luxury rents are projected to continue rising, driven by an influx of mainland Chinese families and some return of expatriates, particularly those in the finance and investment sectors. We expect luxury residential rents to rise by 0-5% in 2025.