Residential transactions in Q2 2026 goes up 32.2% y-o-y, breaking the quarterly record high in Q2 2021

• Primary market sales remained strong in Q2 2026, averaging over 2,300 new home sales per month (est.), up about 28.8% y-o-y. Most developers continued to raise prices by 5–11% in second-batch launches but still achieving around 90% take-up or full sell-out on day one.
• Demand in Hong Kong’s luxury residential leasing market remained robust in Q2 2026, underpinned by the sustained inflows of non-local talents and professionals through various talent schemes. Luxury residential rental values rose by 0.9% q-o-q.

Residential site attracts strong developer interests in Q2 2026

• In Q1 2026, the supply of luxury homes dropped to 27 units, with 17 units contributed by the Toscana development in Area N1 North at Discovery Bay North.
• In Q2, a residential site (TCTL 54 at Area 106A in Tung Chung) attracted six bids and was awarded to Able Engineering Company Limited for HKD 1.63 bln (A.V. of HKD 3,052 per sq ft), at only around 1% above the second-highest bid, suggesting strong developer attitude.

Luxury residential leasing and investment activity further strengthen in Q2 2026

• In Q2 2026, average mortgage rates remained stable at about 3.3%. Mass residential capital values recorded a 3.0% q-o-q increase, reaching the highest quarterly increase since April 2023, with three consecutive months of m-o-m gains recorded.
• Transaction volume for properties valued at or above HKD 20 million rose by 67.7% in Apr-May 2026, compared to the same period in 2025. Meanwhile, luxury residential capital values jumped 2.2% q-o-q in 2Q26, following a 0.3% rebound in Q1 2026.

Outlook: Primary market growth to moderate amid external risks, with mainland demand to remain as key support despite easing

• Limited supply of luxury units in prime districts alongside the sustained inflows of non-local talents and mainland Chinese professionals will continue to support the high-end leasing market. Luxury rental value is forecasted to maintain a growth rate of 0–5% in 2026.
• Rising rents, tightening supply, and sustained mainland purchases will support continued capital value recovery, while higher interest rate risk and tightening capital controls will limit upside. Luxury capital value is expected to maintain a growth of 0–5% over 2026.