Hong Kong residential prices forecast to rise 15% in 2026 as market sentiment improves, Midland Realty says
Midland Realty expects Hong Kong’s residential property prices to grow 15% this year, driven by improving market sentiment and the possibility that local banks may not fully match US interest rate increases. First-hand transactions rebounded in August, and developers are expected to accelerate new p
Hong Kong's residential property market, named the world's most expensive this year by Deutsche Bank, is forecast to see prices rise 15% in 2026, according to Midland Realty executives. The positive outlook is supported by expectations that local banks would not necessarily match any US interest rate increase by the Federal Reserve this year, the property service firm said at a press conference Thursday, as reported by the South China Morning Post.
“With the improved market sentiment, developers will accelerate the launch of new projects, and the residential market is expected to further recover,” said Dave Ma Tai-yeung, CEO of Midland (Residential). First-hand residential transactions rebounded to 1,100 units in August after declining for two consecutive months to just over 800 units in June and July. Second-hand residential transactions were also gradually stabilising, according to Midland data.
Ma forecast that first-hand property transactions would rise 50% quarter on quarter to 5,100 units in the final quarter, while transactions in the secondary market would increase 10% to 12,700 units. “With residential rents hitting new highs one after another, there is room for property prices to catch up,” Ma said.
Benny Sham, a research analyst at Midland Research Centre, said developers would continue to offer attractive prices when launching new homes, encouraging buyers to shift from the secondary market. “However, based on past experience, strong sales of new properties can boost the housing market and indeed help support transactions and prices in the second-hand residential property market,” he added.
On interest rates, Eric Tso Tak-ming, chief vice-president at mReferral Mortgage Brokerage Services, said Hong Kong banks would not necessarily immediately follow any US rate increase, and could raise their prime lending rates only slightly. Hong Kong’s monetary policy has moved in lockstep with the Federal Reserve’s since 1983 under the Linked Exchange Rate System. While the base rate set by the Hong Kong Monetary Authority follows the US lead, commercial banks can determine when and how to adjust their prime and savings rates.
With Hong Kong Chief Executive John Lee Ka-chiu due to deliver the city’s latest policy address next week, market sources suggested the government could lower the stamp duty threshold for super-luxury homes. “Although the stamp duty on super-luxury homes was increased in the February budget, as we have consistently stated, demand for super-luxury homes remains very robust,” Sham said. “We’ve seen first-hand residential property transactions exceeding HKD100 million [US$12.8 million] remain active since the stamp duty adjustment in February.” More than 80 first-hand residential property sales exceeding HKD100 million had taken place this year, Sham added, surpassing the total for the entire previous year in just over eight months.
