HK home prices expected to rise despite macroeconomic uncertainties

Hong Kong home prices are expected to rise by 3 percent to 5 percent over the next three years as key underlying factors begin to improve, even as macroeconomic uncertainty continues to weigh on the city’s real estate market, according to a report from Bocom International (3329).

The bank estimates Hong Kong home prices to rise by 3 percent in the second half of 2025, followed by 5 percent increases in both 2026 and 2027, supported by a rebound in population and the recent decline in the Hong Kong Interbank Offered Rate.

Housing demand is expected to benefit from both returning residents and an influx of new talent through government schemes, leading to stronger short-term rental growth. 

Overall residential rents are forecast to rise 2 percent to 3 percent this year, with areas near major business hubs and universities potentially seeing over 5 percent gains due to newcomer preferences.

The retail property sector remains under pressure amid shifting consumption patterns, though the stabilization of cross-border spending has slightly eased the strain on local retailers.

The office market outlook is cautious, according to the research note. Despite a modest improvement in vacancy rates, high supply from upcoming completions will likely cap any near-term rebound. Grade-A office rents in core districts are expected to fall 3 percent to 5 percent year-on-year in 2025, barring a significant economic or sentiment shift.

STAFF REPORTER