Hong Kong Real Estate to Maintain Momentum as Deals Hit 3-Year High

Property transactions totalled 67,662, valued at US$68.2 billion in 2024, according to Midland data

Hong Kong’s real estate transactions are expected to gather pace after hitting a three-year high in 2024 on the back of improving sentiment because of factors like higher loan values, interest-rate cuts and demand from the investment-migration scheme.

A total of 67,662 deals for new and lived-in homes, offices, shops, industrial units and car parking spaces were completed as of December 30, up 16% from 58,035 transactions in 2023 and the highest since 96,133 in 2021, according to data compiled by Midland Realty. “With the rebound in the number of deals, the overall registered property value last year exceeded HK$530 billion (US$68.2 billion), an increase of more than 10% from HK$477.9 billion logged in 2023,” said Buggle Lau Ka-fai, Chief Analyst at Midland. However, overall transactions last year were 6% lower than the five-year average of 72,380 per year from 2019 to 2023, while the value was 20% lower than annual average over the same period at HK$654 billion, he added.

The increase in overall real estate registrations last year was led by the residential market, according to the property agency. Sales of new and lived-in homes were supported by the withdrawal of property curbs in February, as well as favourable measures announced by Hong Kong’s Chief Executive John Le Ka-chiu in his policy address in October. These included easing of loan-to-value ratios for mortgages and inclusion of residential property assets in the Capital Investment Entrant Scheme, better known as the investment-migration scheme.

“With the rebound in the number of deals, the overall registered property value last year exceeded HK$530 billion (US$68.2 billion), an increase of more than 10% from HK$477.9 billion logged in 2023.”

Buggle Lau Ka-fai, Chief Analyst at Midland Data

The start of the falling-rates cycle coupled with a rise in rents amid falling home prices also attracted end users to switch to buying, while long-term investors entered the market, Lau said. Optimism returned to the property market following a half-point reduction in interest rates in September, which was further boosted by the easing of mortgage rates for homebuyers and investors in October.

In November, HSBC, Hang Seng Bank and Bank of China (Hong Kong) cut their prime lending rate for the second time last year to a two-year low of 5.375%. Standard Chartered, Bank of East Asia and ICBC (Asia) also dropped their rate to 5.625%, resulting in lighter mortgage rates for homebuyers. “We expect the prime rate could a see 25-50 basis point cut from the current level by end-2025 on the back of US Fed Fund rate cuts ahead, which would lead to lower mortgage rates and positive cost of carry in Hong Kong – the first time in three years,” said Will Chu, Senior Research Analyst for Hong Kong and China property at CGS International Securities. “This will trigger more home purchases by end users and investors as we expect Hong Kong residential rents to rise 4% in 2025, driven by strong demand for rental flats from Chinese professionals and students residing in Hong Kong.”

Chu said he expected primary transactions to rise 6% this year. Prices of lived-in homes rose marginally for a second straight month in November, as a closely watched gauge edged up to 290.9 from 290.7 in October, according to the Rating and Valuation Department. Home prices fell 6.55% in the first 11 months of last year, slumping 27% from a record high in September 2021.

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