Hong Kong’s home prices may record a decline of up to 3 percent this year while rents may climb up to 5 percent influenced by interest rates, new home inventory, and US-China trade tensions, according to Knight Frank.
The property consultancy said the home loan-related interbank rate has declined to a new low for three years, and lower mortgage costs will attract more home purchase for investment.
It expects local developers to continue to cut prices to deal with high inventory with the market seeing 17,500 flats waiting to be sold, and 30,280 units to be offered in the next 18 months.
Amid uncertainties surrounding US tariff policies, Knight Frank anticipates that this year’s residential flat prices will remain flat or drop up to 3 percent.
Regarding luxury mansions, the consultancy said that those priced between HK$20 million and HK$40 million will decline up to 5 percent while those above HK$40 million may remain flat.
Boosted by new immigrants and non-local students, home rents will jump by 3-5 percent.
Martin Wong Shiu-kei, director and head of research and consultancy of Greater China at Knight Frank, said that for 2025 to 2026, land sale revenue is forecast to reach between HK$7 billion and HK$9 billion. Meanwhile, land premiums paid for private development are expected to rebound to between HK$8 billion and HK$10 billion.
The consultancy anticipates rents of the grand-A office will be lower by up to 3 percent on Hong Kong Island while office rent in Kowloon will drop up to 11 percent for the entire 2025.
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