Primary transaction volume remains at a relatively high level as developers continue to push new launches

• After a rebound in HIBOR during Q3 2025, rates declined modestly in Q4 2025, reaching 3.1% by end-December. Meanwhile, major banks reduced their prime rates by 12.5 bps, following the FED’s rate cut in October but did not follow its subsequent December cut.
• In Q4 2025, housing demand kept shifting towards new projects. In November, Cullinan Sky Phase 2 in Kai Tak sold out all 62 units launched in the first round. The primary market also saw significant interest from Mainland buyers.

One residential site is tendered in Q4 2025

• In Q3 2025, 74 luxury residential units were completed. These included 37 units at Cullinan Harbour in Kai Tak, and 5 units at 5 Headland Road in Repulse Bay. A total of 185 luxury residential units is expected to be completed in 2025.
• In Q4 2025, a residential site at Junction of Wing Shun Street and Texaco Road, Tsuen Wan (TWTL 441) was awarded to Chinachem, at an A.V. of HKD 5,692 per sq ft.

Momentum continues in the luxury leasing market

• The inflow of non-local talents and the return of expats continued to support the demand in the luxury leasing market, with rental values rising by 2.3% q-o-q in Q4 2025.
• Capital market activity in the high-end segment expanded in Q4 2025. The transaction volume for properties valued at or above HKD 20 million rose by 24.8% q-o-q. Meanwhile, luxury residential capital values increased by 0.2% q-o-q in Q4 2025.

Outlook: Resilient primary market to support overall market sentiment

• Reduced financial pressure and unwinding pent‑up demand will support market recovery, with developers actively launching primary projects to offload stock. We expect mass and luxury residential capital values to rise by about 5% and remain stable in 2026, respectively.
• Luxury rents are projected to continue rising, supported by the resilient primary market and strong leasing market. We expect luxury residential rental values to rise by 0-5% in 2026.