Morgan Stanley raises HK home price growth forecast to 12 percent

Morgan Stanley has raised its 2026 home price growth forecast for Hong Kong from 10 percent  to 12 percent, following a strong 7.7 percent surge in prices since the start of the year.

The bank expected the residential market to enter a new upcycle with a further 5 percent increase in 2027, driven by robust sales and reduced land supply. Inflows of capital and talent from Mainland and the Middle East are also expected to support this growth.

Office and retail sectors will also benefit, with office in Central rental growth forecast raised from 3 percent to 5 percent as vacancy rates drop.

Retail sales growth estimates were upgraded to 5 percent as well due to more tourists, a stronger Yuan and more major events. 

The bank also expects retail rent to achieve positive growth by the end of this year.

Meanwhile, Citi maintained its forecast that home prices will rise 8 percent this year and gain a further 15 percent in total from 2026 to 2027.

Citi said strengthening confidence and recovering investment demand should support new home prices and boost earnings growth for developers. 

Effie ZHANG

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