Hong Kong’s residential property market remains caught in a tug-of-war, with bullish momentum stymied by a host of bearish fundamentals, according to the latest market outlook from JLL.
While a drop in HIBOR, rebounding equities, and targeted stamp duty relief have offered glimmers of support, the broader housing landscape remains clouded by persistent structural and macroeconomic challenges. These include intensifying geopolitical risks, a surge in negative equity to 22-year highs, and aggressive developer discounts–often exceeding 30%–in a bid to clear mounting inventory.
Secondary home transactions ticked up slightly in the first half of 2025, reaching roughly 20,000 units. But volume still trails the 2018-2024 average, and analysts warn that the uptick lacks the scale typically needed to drive a genuine price recovery. Historically, price rebounds have only followed when transaction volumes surged by 50% or more.
Meanwhile, pressure is building in the primary market. As of March, developers were sitting on a pipeline of approximately 93,000 unsold units. Inventory overhang is so pronounced that, at current absorption rates, it would take nearly 57 months to clear–well above the six-year average of 51.3 months. Without a drastic improvement in sales velocity, developers are expected to keep slashing prices, drawing out a correction cycle that may not bottom until 2026.
Still, not all signals are flashing red.
Hong Kong’s deposit base has doubled since 2021, improving positive carry and prompting speculation that yield-seeking capital may start flowing back into the property market. Immigration through talent and professional visa schemes is also surging, with more than 27,000 new arrivals in Q1 alone. That’s likely to first boost rental demand before filtering into homeownership.
“Developers will need to continue offering incentives to maintain sales momentum,” said Joseph Tsang, Chairman of JLL in Hong Kong. “If HIBOR remains under 2% for a prolonged period, it could spark renewed interest from buyers adjusting to this lower-rate environment.”
JLL expects residential rents to hit record highs this year, fueled by inflows of non-local professionals and students. However, the consultancy downgraded its capital value forecast for luxury homes, citing pressure from distressed commercial property sales. Mass-market residential prices are projected to fall 5% in 2025, while luxury segments may see declines of 5% to 10%.
In short, Hong Kong’s housing market remains on edge–trapped between nascent macro tailwinds and entrenched structural headwinds. Until inventory clears and sentiment stabilizes, a sustainable recovery remains out of reach.
Hong Kong Residential Indicator – Percentage Change
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