Hong Kong's private home prices snapped a three-year decline, with the official full-year price index climbing 3.25 percent, the Rating and Valuation Department said on Wednesday.
For December alone, the private residential price index increased 0.23 percent month-on-month to a half-year high at 298.6, advancing for the seventh straight month, while the figure still represented around 25 percent lower than the peak in 2021.
The seven-month period marked the longest rally for over four years, representing an accumulated growth of 4.22 percent for home prices.
The prices of small and medium-sized flats rose 0.23 percent month-on-month, while flats above 100 square meters saw their prices increase 0.22 percent.
Of these, prices of flats under 40 sq m edged up 0.03 percent, while those for homes between 40 and 69.9 sq m went up 0.31 percent. Flats sized from 70 to 99.9 sq m also recorded a price hike of 0.5 percent.
Driven by demand from talent immigration schemes and overseas study needs, the private residential rental index reached a fresh record at 200.7 in December, up 0.1 percent from a month ago, bringing the full-year growth to 4.3 percent.
Home prices will see 10 percent growth this year, led by luxury homes, due to their scarcity and status as high-quality assets, said William Kwok Tze-wai, CK Asset's (1113) chief sales manager.
As Hong Kong stocks touched a four-and-a-half year high, coupled with the safe-haven demands reflected in the gold rally, the city's property market will not only draw local buyers but also attract international high-net-worth capital, he added.
Attractive rental yields and the full removal of property cooling measures in the 2024 Policy Address further fuelled strong market sentiment, while large-scale first-hand projects have been particularly appealing to investors, long-term family funds, and Mainland buyers for both asset allocation and self-use, said Alvin Leung, senior director of Valuation & Advisory Services at Colliers.
The overall residential prices are expected to rise by 3 to 5 percent this year, while the luxury residential segment, due to its unique supply and superior locations, may see even more pronounced growth, he added.
The company also forecasted the rents to grow by around 5 percent, as the increase in the admission cap for non-local students at Hong Kong's tertiary institutions will continue to support rental demand.
CBRE said the home price hike for the full year met its expectation, and it estimated the growth will advance in the range of 3 to 5 percent in 2026.
When the inventories drop to lower than 18,000 units, developers are expected to cut discounts, thus boosting the properties' prices, it added.
