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Hong Kong’s lived-in home prices rose for a sixth consecutive month in November, extending a recovery that began in the second quarter and pointing to a potentially more sustained rebound from mid-2026 as policy support and easing rates lift market confidence.
The official home price index climbed to 297.3 in November, the highest level in 16 months and just shy of the 297.6 recorded in July last year, according to the Rating and Valuation Department.
Prices have gained 3.52 per cent so far this year, marking a clear improvement from 2024, when values continued to slide amid weak demand and tight financing conditions.
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Prices rose 0.9 per cent month on month in November, supported by expectations of further interest-rate cuts, easing US-China trade tensions, a rebound in the stock market and strong new-home sales, analysts said.
Looking ahead, price growth was expected to moderate in December after a strong run earlier in the quarter, as market sentiment was shaken late in November by a deadly fire at Tai Po’s Wang Fuk Estate, which claimed at least 161 lives and weighed heavily on public mood. Attention also shifted towards the Legislative Council election, contributing to a temporary pause in transactions.
“As a result, December’s price increase is likely to narrow to around 0.5 per cent,” said Derek Chan, head of research at Ricacorp Properties. Chan said home prices were still on track to rise about 3.3 per cent for the full year, wiping out the downtrend of the previous three years.
He added that prices in the second half of the year were expected to post a 4.2 per cent gain, the strongest half-year performance since the second half of 2019. Despite the recovery, prices remain 25.3 per cent below the September 2021 peak.
The sustained uptrend began in April after the government lowered stamp duty, triggering a pickup in transactions. Since then, developers had sold more than 1,600 new homes per month on average, property consultants said.
However, analysts cautioned that price growth remained constrained by a large stock of unsold homes accumulated after prices fell sharply from their 2021 peak. Developers have prioritised clearing inventory, often launching projects at or near market prices with discounts and financing incentives.
First-hand home sales reached 18,736 units in the first 11 months of the year and were expected to rise to around 20,000 units by year-end, the highest since transaction disclosure rules were introduced in 2013, according to Midland Realty. Flats priced below HK$10 million (US$1.3 million) are estimated to account for about 87 per cent of primary market transactions this year.
Rising prices are supported by expectations of further interest-rate cuts, easing US-China trade tensions, a rebound in the stock market and strong new-home sales, analysts say. Photo: Dickson Lee alt=Rising prices are supported by expectations of further interest-rate cuts, easing US-China trade tensions, a rebound in the stock market and strong new-home sales, analysts say. Photo: Dickson Lee>
The overall transaction value by year-end was expected to reach about HK$200 billion, the highest in four years, although still 6.2 per cent lower than the 2021 level, according to Midland.
Meanwhile, the city’s rental index rose to 200.7 in November, the second consecutive month that it surpassed the previous peak set more than six years ago. Rents have climbed 4.1 per cent so far this year, exceeding the full-year increase recorded in 2024.
Analysts attributed the resilience to government talent schemes, which have helped stabilise the labour force and attract higher-income earners. Rents are expected to remain steady in coming months and rise 3 to 5 per cent on year in 2026.
Developers are expected to keep clearing stock into 2026, even as discounts gradually narrow. Around 26,479 new flats are scheduled to be launched next year across Kai Tak, the North District, Tung Chung and Yuen Long, Midland said.
At the current pace, analysts estimate that another 12,000 to 13,000 units must be absorbed before prices can rebound more decisively. Inventory is unlikely to return to healthier levels before mid-2026, said Martin Wong, senior director at Knight Frank, adding that a more meaningful price recovery is increasingly likely after that point.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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