The prices of second-hand properties in Hong Kong are not expected to see a significant rebound in the short term. It is expected that Hong Kong banks will further reduce interest rates within the year.

Leung Fung, senior director and head of research and consultancy for Greater China at Knight Frank, said that the ongoing US tariffs continue to bring uncertainty to the global economy. The Federal Reserve is likely to cut interest rates by 0.25% in October to boost the economy. He predicted that property prices in Hong Kong will start to improve in the coming months, but could rise by 2 to 3% for the whole year in 2025. There is a possibility of a significant improvement in the first half of 2026, with a chance of a 5% increase in property prices for the whole year. Leung predicted that Hong Kong banks will lower their prime lending rates by another 0.25% this year, bringing it down to around 3%, below the rental yield, which is expected to attract more investors to the market. Leung pointed out that the market sentiment is improving, but high unsold inventory levels and high interbank rates have prevented a significant decrease in interest rates. Market purchasing power continues to favor new developments, while the pricing strategies of developers have not shown much aggression, leading to a lack of significant price increases in the short term for the secondary market. Leung expects sales of new developments to perform better than the secondary market, but high unsold inventory levels need to decrease by 12,000 to 13,000 units before prices can rise. At the current sales pace, prices could return to a healthier level in the first half of 2026. Monthly transactions are expected to hover around 5,000 units in the short term, with total transactions reaching 60,000 to 62,000 units for the year. Developers are actively trying to sell their inventory, and with the overhang in the market, they are likely to offer more discounts and financial plans to attract buyers. Additionally, various talent programs by the Hong Kong government have slightly increased the size of the labor force and high-income individuals, providing continued support for residential rental demand. Rental trends are expected to remain stable in the coming months, with a potential increase of 4 to 5% this year, reaching historical highs. Rental trends are expected to continue rising steadily in 2026, with a further increase of 3 to 5%.