Soaring Rent, Mainland Capital Fuel Hong Kong’s Property Rebound

Hong Kong’s property market is experiencing a significant rebound after enduring more than three years of decline, with home prices reaching their highest level in 14 months by September. This marks a turning point for the city’s real estate sector, which had previously seen prolonged stagnation and falling values. The recovery is viewed as a critical sign for both the local economy and investors who have been closely observing for indications of a turnaround. [para. 1]

According to the city’s Rating and Valuation Department, the private home price index climbed by 1.32% from the previous month, reaching 292.5—its fourth consecutive monthly gain. This brings the accumulated increase over the most recent four months to 2.1%, demonstrating a consistent upward trend. Chan Wing-kit, vice chairman and residential division president for Centaline Property in the Asia-Pacific, confirmed that Hong Kong’s residential property market has successfully bottomed out and has started an upward trajectory. [para. 2][para. 3]

Several factors are contributing to this recovery. A notable increase in purchases by buyers from mainland China has been observed, alongside record-high rental demand triggered by an influx of skilled professionals and students. Meanwhile, property developers have been actively clearing their inventory of unsold units, further supporting the market’s upward momentum. [para. 4]

Year-to-date data shows that the property price index rose by 1.14% for the first nine months of 2025. However, experts such as Eddie Kwok of CBRE Hong Kong predict that the full-year growth in home prices will remain moderate—at or below 5%—largely due to developer strategies focused on sales volume, which exert downward pressure on prices. [para. 5]

Supply-side figures reinforce this trend: the inventory of unsold new private homes dropped for the second consecutive quarter to 20,479 units in the third quarter, reaching a nine-quarter low. Chan from Centaline projects this inventory may reduce further to between 17,000 and 18,000 units by the year’s end, and anticipates full-year home price growth of about 5%. [para. 6]

Buyers from mainland China have emerged as a dominant segment in the market, making up a quarter of all new and secondary private home transactions in the third quarter. Data shows mainland buyers, identified by pinyin romanization, completed 3,797 deals (up 6.7% from the previous quarter) with a total transaction value of HK$38 billion (about US$4.9 billion), representing a 14% increase. [para. 7]

The city’s rental market is also booming, lending strong support for home values. In September, the private home rent index increased for the tenth straight month to 200, nearing its all-time high set in August 2019. Cumulatively in 2025, rents are up 4.22%. [para. 8]

The surge in rents is attributed to robust demand from incoming skilled professionals under various talent schemes and a surge in non-local students, leading to a “rental frenzy”—especially in neighborhoods near universities. For example, average rents near the University of Hong Kong have escalated to HK$65 per square foot, with small apartments (about 215 square feet) renting for as much as HK$13,000 (US$1,670) per month. [para. 9]

Analysts suggest that rising rents will increasingly drive tenants to consider buying homes, as it may become more economical to purchase rather than rent. The rent index is expected to hit a record high in October, which is likely to further attract both renters and investors to the property market, amplifying the ongoing recovery. [para. 10]