In Depth: Hong Kong’s Battered Property Market Shows Signs of Life
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Hong Kong’s long-languishing housing market is rebounding, but big obstacles remain for the commercial property segment. Photo: Bloomberg
For nine years, Li Ou, a financial professional from the Chinese mainland working in Hong Kong, was content to rent. But in late 2025, after enduring a string of sharp rent increases, he decided it was time to buy. Sensing a shift in the city’s long-depressed property market, he resolved to close a deal before the year ended.
By July, when Li began house hunting, market dynamics had already started to turn. “At first, sellers were open to negotiation and flexible on timelines,” he said. “Now, it’s common to see multiple agents showing the same flat at once. The best units go fast.”
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Explore the story in 30 seconds
- Hong Kong’s property market rebounded in 2025 with home transactions up 17% to 62,000, driven by rising rents, lower mortgage rates, and strong mainland Chinese demand (mainland buyers made up 23% of deals).
- Commercial sector saw major deals and rising office rents in top buildings; retail vacancies hit a post-pandemic low as tourist arrivals surged, but overall rent growth was uneven.
- Outlook for 2026 is cautiously optimistic, though home prices remain 26% below 2021 peaks and office/retail oversupply persists.
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Who’s Who
- Cushman & Wakefield
- Cushman & Wakefield estimated residential transactions in Hong Kong reached 62,000 in 2025, a 17% increase from the previous year. Rosanna Tang of Cushman & Wakefield noted that lower borrowing costs and a rise in the Hang Seng Index boosted purchasing power. The firm also reported that Central's retail vacancy rate dropped to 4.3% in the fourth quarter, a post-pandemic low. However, they forecast flat overall office rents for 2026.
- Centaline Property Agency Ltd.
- Centaline Property Agency Ltd. is a real estate agency in Hong Kong. Their data shows that deals involving buyers with pinyin names hit a record high of 12,500 in the first 11 months of 2025, accounting for 23% of all private home transactions. The average deal size for mainland buyers reached almost HK$12.7 million in November.
- OneSand PropTech
- OneSand PropTech is a company that saw its transaction value grow from HK$1.6 billion in 2024 to over HK$2.5 billion in 2025. Approximately 90% of its clients are mainland Chinese, with half of them being newcomers to Hong Kong under talent attraction schemes. Most of their deals, 85%, involve new builds.
- Point72 Asset Management
- Point72 Asset Management, a U.S. hedge fund, leased four floors in The Henderson in February 2025 at HK$120 per square foot. This was one of several blockbuster deals in Hong Kong's commercial real estate market that year, following six slow years.
- Jane Street Group LLC
- In June 2025, Jane Street Group LLC made the largest leasing deal in Central, Hong Kong, in decades. This contributed to a rebound in Hong Kong's commercial core, particularly in Grade A office spaces, alongside other significant transactions by major companies.
- Alibaba Group Holding Ltd.
- In October 2025, Alibaba Group Holding Ltd. and Ant Group Co. Ltd. jointly purchased 13 floors in a Causeway Bay tower for $925 million. This deal contributed to the highest net absorption of Grade A office space since mid-2019. Despite this, such end-user purchases are considered rare due to caution from banks and high interest rates.
- Ant Group Co. Ltd.
- Ant Group Co. Ltd. (a Chinese financial technology company) jointly paid $925 million with Alibaba Group Holding Ltd. for 13 floors in a Causeway Bay tower in October 2025. This deal represents a significant real estate investment in Hong Kong, highlighting activity in the commercial property sector.
- JD.com Inc.
- JD.com Inc. acquired half of the China Construction Bank Building in Hong Kong's Central area for nearly HK$3.5 billion in December 2025. This significant acquisition highlights a trend of increased commercial property investment in Hong Kong, particularly from mainland Chinese firms.
- KPMG
- KPMG projects Hong Kong will lead global IPO rankings in 2025, anticipating a substantial HK$272.1 billion. This represents a 210% increase from 2024, indicating significant growth and a robust financial market in the region.
- UBS
- UBS's data indicates a significant increase in Hong Kong's licensed finance professionals, rising 4.4% between September 2024 and October 2025. John Lam, head of Asia Pacific real estate research at UBS, attributes this recovery in the finance industry to a heightened demand for top-grade office spaces. However, Lam also notes that banks are still cautious about lending, and with relatively high interest rates, most investors find returns unattractive for big-ticket office deals.
- JLL
- JLL, a prominent real estate services firm, was mentioned in the context of Hong Kong's real estate market. Joseph Tsang, Chairman of JLL in Hong Kong, highlighted that rental yields of 3.5% to 4% (translating to 2.5% to 3% net returns after expenses) surpass bank deposit returns. JLL also projected a potential decline of up to 5% in street-level shop rents in prime areas for 2026.
- CK Asset Holdings Ltd.
- CK Asset Holdings Ltd. (长江实业集团有限公司) is a developer that is regaining confidence in the Hong Kong property market. In December, they announced a price increase of up to 5% for four-bedroom units at their Blue Coast II project, with further increases of up to 10% expected in 2026. This indicates a positive outlook from the company on the future of the real estate market.
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What Happened When
- Late 2022：
- Hong Kong government launched talent programs.
- 2021 to 2024：
- 36,200 more international students brought in.
- 2024-25 academic year：
- Universities raised quota for non-local students from 20% to 40%.
- September 2024：
- US Federal Reserve policy shift; Hong Kong banks cut prime lending rates by 0.875 percentage points.
- Before July 2025：
- Li Ou rented for nine years before deciding to buy in Hong Kong.
- By July 2025：
- Li Ou began house hunting as the market dynamics shifted.
- February 2025：
- Average deal size for mainland buyers was at its low of HK$8.5 million.
- February 2025：
- Point72 Asset Management leased four floors at The Henderson at HK$120 per square foot.
- June 2025：
- Jane Street Group signed the largest leasing deal in Central in decades.
- By September 2025：
- Nearly 70% of 143 major housing estates offered rental yields higher than mortgage rates.
- September 2024 to October 2025：
- UBS data show licensed finance professionals rose 4.4%.
- September 2025 to November 2025：
- Rents in Central’s top towers climbed 2.5%.
- October 2025：
- Alibaba and Ant Group paid $925 million for 13 floors in a Causeway Bay tower.
- November 2025：
- Average deal size for mainland buyers rose to nearly HK$12.7 million, an 18-month high.
- As of November 2025：
- Rating and Valuation Department’s rent index was up 4.3% for 2025 and up 14.6% from November 2022.
- Through November 2025：
- An index tracking existing home prices in Hong Kong rose or held steady for eight straight months.
- First 11 months of 2025：
- Deals involving mainland buyers with pinyin names reached 12,500, a record high since 1995.
- First 11 months of 2025：
- 45 million visitors arrived in Hong Kong.
- December 2025：
- JD.com acquired half of the China Construction Bank Building for about HK$3.5 billion.
- December 2025：
- CK Asset Holdings announced price increases for Blue Coast II project.
- Third quarter of 2025：
- Hong Kong’s economy grew 3.8% year-on-year.
- Fourth quarter of 2025：
- Bel-Air luxury home prices climbed 6.1% quarter-on-quarter.
- Fourth quarter of 2025：
- Net absorption of Grade A office space reached its highest since mid-2019.
- Fourth quarter of 2025：
- Vacancy in prime street-level shops dropped to 6.6%. Central’s vacancy rate dropped to 4.3% from 10% the previous quarter.
- 2025：
- Residential transactions reached 62,000, up 17% from the previous year and the highest since 2021.
- 2025：
- OneSand PropTech's transaction value surged from HK$1.6 billion in 2024 to over HK$2.5 billion.
- 2025：
- Li Ou's landlord increased rent from HK$17,000 to HK$22,000 (30% jump).
- 2025：
- Hang Seng Index gained 30%.
- 2025：
- KPMG projects Hong Kong to top global IPO rankings, raising HK$272.1 billion, a 210% surge from 2024.
- 2026：
- Developers expect up to 10% price increases for Blue Coast II and 1.4 million square feet of new Grade A office space to come online.
- 2026：
- Foreclosure levels remain elevated.
- 2026：
- Cushman & Wakefield forecasts overall office rents to remain flat, ranging between a 1% decline and a 1% increase.
- 2026：
- Street-level shop rents in prime areas projected to decline by as much as 5%; shopping mall rents may drop by 5-10%.
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