Ricacorp: Rate hikes unlikely to reverse upward trend, Hong Kong home prices expected to rise at least 10% for the full year

Hong Kong's Rating and Valuation Department announced that the private residential price index for August 2026 stood at 320.5 points, edging up 0.06% month-on-month and reversing the previous single-month decline. Compared with the historical high of 398.1 points in September 2021, home prices are still down 19.49%. Chen Haichao, head of the research department at Ricacorp Properties, said that after a brief one-month breather, the property market has quickly stabilized and halted its decline amid improving economic performance, a stock market rebound and sustained demand, and the outlook remains optimistic. Looking ahead to September, Chen Haichao believes that reflecting the continued strong sales of new projects from late August to early September, with oversubscribed launches and sell-outs commonplace, prices can be supported in staying firm. Although the US has begun raising interest rates, Hong Kong has not yet followed suit; as long as rate hikes are not rapid and large-scale, they are unlikely to crush the property market and at most will only slow the pace of gains. He expects home price growth in September to be within 0.5%, with the third quarter as a whole forecast to fall 0.28%, but with a fourth-quarter rebound, full-year home prices are still seen rising at least 10%. On rents, the latest figures from the Rating and Valuation Department show that the rental index for August 2026 stood at 210.3 points, surging 1.64% month-on-month, the largest single-month increase in nearly 27 months. Rents have now risen for 10 consecutive months and repeatedly hit record highs, accumulating a gain of 5.2% over the period. In addition, since December 2024, rents have held steady or risen for 21 consecutive months, with a cumulative increase of as much as 9.59%. Chen Haichao expects that with the residual momentum of the summer peak season, rents may maintain a gain of about 1% in September, and although the pace of increase is expected to slow in the fourth quarter, full-year rents are still seen rising 7.53%.