Hong Kong's Real Estate Market Experiences Rebound in 2025

Hong Kong's real estate market has shown signs of recovery after a prolonged downturn, with lived-in home prices increasing by 3.25% in 2025, marking the end of a three-year decline. Analysts attribute this rebound to several factors, including macro-level interest rate cuts, a buoyant stock market, and increased demand from talent schemes and non-local students. The Rating and Valuation Department reported that rents surged to a record high in December 2025, reflecting a 4.26% annual increase, which is the third consecutive year of rising rents.

Hong Kong home prices snap 3-year downturn as rents surge to a new highAll signs point to a rebound in Hong Kong’s housing market: Morgan Stanley analystOffice market records 15.6% vacancy; Central rents rise 3%

Praveen Choudhary, head of Asia gaming and property research at Morgan Stanley, noted that Hong Kong is experiencing its first synchronized growth cycle across major real estate segments in nearly a decade. He anticipates home prices could rise by approximately 10% in 2026, driven by falling borrowing costs, rising rents, and the impact of policy changes, particularly the abolition of stamp duties in 2024. This policy shift, which had imposed levies of up to 30% on buyers and sellers, is seen as a crucial factor in restoring market confidence.

All signs point to a rebound in Hong Kong’s housing market: Morgan Stanley analystHong Kong home prices snap 3-year downturn as rents surge to a new highMorgan Stanley signals Hong Kong real estate synchronized growth after a decade

The office market in Hong Kong also reflects a mixed landscape. In the fourth quarter of 2025, the vacancy rate stood at 15.6%, with a positive quarterly take-up of 880,125 net square feet. Average unit rents reached $49.5 per square foot, with premium rents in the Central district rising by 3% year-on-year. However, traditional office rents in Central fell by 7.1%, and peripheral markets like Causeway Bay and Quarry Bay experienced declines of 8.1% and 8.6%, respectively. The banking and finance sector remains the primary driver of demand, accounting for 62% of the quarterly take-up.

Office market records 15.6% vacancy; Central rents rise 3%Hong Kong home prices snap 3-year downturn as rents surge to a new highAll signs point to a rebound in Hong Kong’s housing market: Morgan Stanley analyst

Despite the optimistic outlook, some analysts caution that the recovery may not be uniform across all sectors. The significant vacancy rates in Kowloon and the decline in rents for traditional office spaces suggest that not all areas are benefiting equally from the market rebound. Concerns remain about the sustainability of this growth, particularly in light of ongoing competition from new developments.

Office market records 15.6% vacancy; Central rents rise 3%

Alvin Leung, senior director of valuation and advisory services at Colliers, emphasized that the removal of property cooling measures in the 2024 policy address has further fueled strong market sentiment. He noted, “Hong Kong’s residential market strengthened notably since mid-last year,” highlighting the interplay of various economic factors contributing to the current recovery.

Hong Kong home prices snap 3-year downturn as rents surge to a new high

Looking ahead, analysts predict that the positive momentum in Hong Kong's real estate market may continue into 2026, with expectations of further price gains and increased transactions. However, the market remains cautious, with ongoing challenges in certain sectors that could impact overall growth.

Hong Kong home prices snap 3-year downturn as rents surge to a new high