Residential transaction volume rose by 54.0% y-o-y in Q1 2026

• Primary market remained robust in the first two months of 2026, averaging over 2,000 new home sales per month — more than double the same period in 2025. Developers progressively raised prices by 4–5% while reducing average discounts, reflecting improved confidence.
• In Q1 2026, average mortgage rates remained stable at about 3.3%. Mass residential capital values recorded a 0.5% q-o-q increase in Q1 2026, reaching the highest level since October 2024, with five consecutive months of m-o-m gains recorded.

Three residential sites are tendered in Q1 2026

• In Q4 2025, the supply of luxury homes dropped to 15 units, including six units at 37–39 Bisney Road in Mid-Levels and five units at The Pavilia Forest in Kai Tak.
• In Q1 2026, three residential sites were awarded — NKIL 6675 at Choi Ha Road (China Overseas, HKD 6,532 psf), SIL 860 at Shau Kei Wan Main Street East (Kerry Properties, HKD 9,343 psf), and NKIL 6674 at Choi Hing Road (Sino Land/Great Eagle consortium, HKD 4,339 psf).

Luxury leasing and investment activity strengthen on broad market recovery

• Demand in Hong Kong’s luxury residential leasing market remained robust in Q1 2026, underpinned by the return of expatriates and sustained relocation interest from mainland Chinese professionals and families. Luxury residential rental values rose by 1.2% q-o-q.
• Transaction volume for properties valued at or above HKD 20 million rose by 120.0% in Jan-Feb 2026, compared to the same period in 2025. Meanwhile, luxury residential capital values increased by 0.3% q-o-q in Q1 2026, following a 0.2% rebound in Q4 2025.

Outlook: Strengthening primary market to broaden recovery across all segments

• Stabilising mortgage rates, declining inventory, and a robust primary market are expected to sustain recovery momentum through 2026. Mass residential capital values are forecast to rise by about 5%, while luxury capital values are expected to remain broadly stable.
• Luxury rents are projected to continue rising, supported by persistent tight supply across prime districts and sustained demand from expatriates and mainland Chinese professionals. Luxury residential rental values are expected to increase by 0 to 5% over 2026.