Hong Kong home prices are forecast to rise about 5 percent next year, while rental growth is expected to slow to roughly 3 percent, according to Cushman & Wakefield.
The sustained low-interest-rate environment and wealth effects from a buoyant stock market have supported improved housing market sentiment, with the estimated total residential transactions in the fourth quarter reaching nearly 16,400 units, up 9 percent year-on-year, the real estate services firm said.
It projected that the total full-year residential deals will record approximately 62,000 units, rising 17 percent from the previous year, and is expected to be in line with the level of next year.
Boosted by the flow of talents and non-local students, the retail housing sector retained strong growth potential in 2026, while the rental hike will be more modest than this year.
Regarding the Grade A office market, rents would fluctuate within a narrow range of -1 to 1 percent amid the supply pressure, with 1.4 million square feet of new Grade A offices to be completed in 2026.
The overall net absorption rose to 476,000 sq ft in the fourth quarter as of mid-November - the highest level after the second quarter of 2019, as leasing demand was buoyed by active initial public offering activity and attractive rents.
The year-to-date cumulative net absorption reached nearly 1.1 million sq ft, while the overall rental declined 4.1 percent during the period.
Supported by rising tourist arrivals and more stable local consumption, the average high street vacancy rate fell further to 6.6 percent in the fourth quarter, the firm said.
The company estimated that overall high street retail rents to pick up by 2 percent to 3 percent in the first half of next year.
