Citigroup: Expects further recovery in Hong Kong real estate market next year, with residential prices rising by 3%.

Citibank's report indicates that the Hong Kong real estate market is expected to further recover in 2026 after hitting a low point in 2025, for the following reasons: House prices are entering an upward cycle, with improved new sales profit margins and upward potential in asset net worth; Retail sales: luxury goods are outperforming the overall market, with the mass market stabilizing since May 2025 and expected to steadily recover from the second half of 2026; Office buildings: after reaching a new high in completion in 2025, competition is expected to intensify in 2026, but Grade A office buildings in core areas are expected to perform steadily. Listed companies are becoming more streamlined, with active capital circulation, decreasing debt, lower capital expenditures and financing costs, which should provide cash flow support for growth while maintaining stable dividends; Investment sentiment is rebounding; Chairman/CEO transitions and some new strategies are transitioning smoothly. Citibank predicts a 3% increase in residential prices in 2026, entering a multi-year upward cycle. Citibank's top picks include Sun Hung Kai Properties, Henderson Land Development, New World Development, Hang Lung Properties and Link REIT.