Knight Frank: The Hong Kong residential market has passed the adjustment phase and is expected to see a 5% increase in property prices this year.

Rosanna Tang, Executive Director and Head of Research at Knight Frank, stated that the latest data from the Rating and Valuation Department showed that the Hong Kong private residential price index stood at 298.6 points in December last year, marking a continuous increase for 7 months and reaching a new high in about a year and a half. This led to a cumulative rise of 3.3% in property prices for the whole year of 2025, ending a 3-month decline. The construction cost of small and medium-sized units also saw a year-on-year increase of 3.4%; while the rental index reached a new high for the second consecutive month, reflecting the increasing demand in the residential market that is supporting both property prices and rents in Hong Kong. The housing market has emerged from the adjustment phase and is bottoming out, and it is believed that Hong Kong property prices can continue to grow by around 5% in 2026. She pointed out that the stabilization of property prices in Hong Kong is mainly due to active market transactions and a gradual easing of interest rates. With residential transaction volume maintaining at over 5,000 units per month for 10 consecutive months, coupled with further reductions in mortgage rates by banks reducing the cost of home ownership, the market sentiment has significantly improved.