Hong Kong's property market is entering a long-awaited recovery cycle.
A combination of six factors—the full removal of property cooling measures, interest rate cuts, stock market wealth effects, economic growth, favorable policies, rising rents, and declining inventory—is driving the rebound in Hong Kong's real estate sector.
In the summer of 2025, Guangzhou buyer Zhang Lin (a pseudonym) made a special trip to Hong Kong with her family to view properties. Her goal was clear: a two-bedroom apartment in the Kai Tak area, with a total price not exceeding 8 million Hong Kong dollars.
"With our child planning to study in Hong Kong starting in 2026, we calculated that buying directly would be better than renting first and then buying." After a week of viewings, Zhang Lin ultimately purchased a second-hand apartment measuring approximately 400 square feet.
Since 2025, similar stories involving mainland buyers have frequently emerged at major Hong Kong sales offices and real estate agencies.
The Chief Executive (Residential) of Midland Group and CEO of Hong Kong Properties, Ma Tai-yeung, stated that following the full "withdrawal of spicy measures," new Hong Kong residents have been actively entering the market. Coupled with the government's recent strong efforts to attract talent, some professionals are choosing to settle and buy property in Hong Kong, leading to a noticeable increase in the activity of mainland buyers in the residential market.
Notably, capital market giants are also increasing their investments. In 2025, two major mainland tech giants, Alibaba and JD.com, spent over HKD 10 billion in total to successively acquire prime office buildings in Causeway Bay and Central. Simultaneously, many high-net-worth individuals and property celebrities have also been making moves in the Hong Kong property market.
Official data shows that in 2025, the total number of building sale and purchase agreements in Hong Kong surpassed 80,000, reaching a 4-year high. Both the transaction volume and value involving mainland buyers also hit record highs, marking a long-awaited recovery cycle for the Hong Kong property market.
━━━━ Property transaction volume rebounds to a 4-year high
Data from the Hong Kong SAR Government's Land Registry shows that in 2025, there were 80,702 total building sale and purchase agreements in Hong Kong, an increase of 18.7% year-on-year, reaching the highest level in nearly 4 years. The total transaction value was HKD 614.277 billion, up 15% year-on-year.
Among these, residential building transactions reached 62,832 deals, with a total value of HKD 519.83 billion, increasing by 18.3% and 14.4% year-on-year respectively, becoming the core driver of the overall transaction recovery.
The recovery in transaction volume is also changing the supply and demand dynamics in the market. According to statistics from Midland Realty's research department, as of the end of 2025, the unsold inventory of primary residential units in Hong Kong (including both uncompleted and completed projects) stood at 18,400 units. This represents a decrease of approximately 15% from the 21,700 units at the end of 2024 and has declined for 11 consecutive months, bringing inventory levels back to the lows seen around mid-2023.
"This is a sustained release of demand," said Ma Tai-yeung. He indicated that with buyers continuously entering the market, confidence is gradually recovering, and property prices are showing signs of bottoming out and rising. This is the result of the combined effect of six factors: the full "withdrawal of spicy measures," the impact of interest rate cuts, the stock market wealth effect, economic growth, favorable policies, rising rents, and declining inventory.
From a direct factor perspective, policy relaxation was the key starting point for this round of transaction recovery.
Li Yujia, Chief Researcher at the Housing Policy Research Center of the Guangdong Provincial Urban-Rural Planning Institute, stated that in 2024, Hong Kong fully removed the property cooling measures, with the cancellation of the Buyer's Stamp Duty having the greatest impact on non-permanent residents. Previously, mainland buyers could face additional tax burdens of up to 30%, which significantly suppressed cross-regional property purchase demand.
In early 2025, the Hong Kong SAR Government further raised the property value ceiling for the HKD 100 fixed stamp duty from HKD 3 million to HKD 4 million, significantly reducing transaction costs for mid-to-low-priced residential properties.
Simultaneously, the external financial environment continued to improve. With the U.S. Federal Reserve entering an interest rate cut cycle, Hong Kong mortgage rates followed suit downward, noticeably easing the pressure of monthly mortgage payments. The strong performance of the Hong Kong stock market in 2025 also indirectly boosted the real estate market through the "wealth effect."
Behind this release of demand lies a solid population foundation. As of mid-December 2025, Hong Kong's various talent admission schemes had received over 570,000 applications, with nearly 400,000 approved, and 260,000 talents had arrived in Hong Kong with their families.
"This has generated huge housing demand, both for rental and purchase, driving market demand," Li Yujia said. Against the backdrop of falling interest rates, the rental market has performed strongly, with rental yields in some areas approaching or even exceeding mortgage interest rates. Scenarios where "mortgage payments are cheaper than rent" and "using rent to cover the mortgage" have become feasible again, also boosting the enthusiasm of Hong Kong residents to invest in property.
━━━━ The return of mainland buyers
In this round of recovery, the return of mainland buyers is particularly noteworthy.
According to analysis by Midland Realty's research center based on Land Registry data, in 2025, the number of registrations by mainland buyers (identified by the English拼音 of the buyer's name) in Hong Kong's primary and secondary residential markets totaled 13,906. This represents a 14.1% increase from the 12,190 registrations in 2024. The total value involved was HKD 137.9 billion, also up 3.8% from 2024, setting new historical records for both volume and value.
This means that for every four residential properties sold in Hong Kong, one was purchased by a mainland buyer.
"'Withdrawing the spicy measures' was the biggest factor affecting mainland clients, as they no longer need to pay the 'spicy taxes,' significantly reducing the cost of purchasing property," said Ma Tai-yeung. He noted that since the "withdrawal of spicy measures" at the end of February 2024, the number of residential registrations by mainland buyers has nearly doubled.
In terms of structure, out of the 13,906 residential registration cases, primary properties accounted for 6,495 cases, or 46.7%. Of the total value of HKD 137.9 billion, primary properties accounted for HKD 79.5 billion, or 57.7%. This indicates that nearly half of mainland buyers opted for new developments, and the capital invested in them was close to 60% of the total amount.
Feedback from the front lines of the market shows a clear stratification among mainland buyers.
On one hand, there are new families arriving in Hong Kong, represented by talent schemes like the "Top Talent Pass." They are typically aged 30 to 40, hail from first-tier and strong second-tier cities, work in industries like technology, finance, and professional services, and prefer small to medium-sized units in developments with convenient transportation and mature amenities.
"In 2025, the number of mainland clients coming to view properties has increased significantly, and their decision-making speed is faster than in the previous two years," said Chen Long (a pseudonym), a salesperson at a new development in the Southern District of Hong Kong Island. He mentioned that mainland buyers already account for over 50% of buyers in many developments, with the main motivations for purchase being self-use needs driven by educational resources and talent policies.
Chen Long added that some clients also compare different cities. While mainland first-tier cities offer advantages in terms of living costs, cross-border asset liquidity is weak. Singapore and London have strong attributes for asset allocation, but their living and educational adaptability are not as good as Hong Kong's. Therefore, Hong Kong holds a more comprehensive advantage for cross-regional living and career planning within the Guangdong-Hong Kong-Macao Greater Bay Area.
On the other hand, there are high-net-worth individuals who view Hong Kong property as a "ballast stone" for cross-border asset allocation. They prefer properties in core areas, value asset security, and have long holding periods.
"Hong Kong's primary luxury homes are very popular among mainland buyers, with super-luxury properties being particularly favored by mainland tycoons," revealed Ma Tai-yeung. In 2025, among known individual buyer cases, mainland buyers accounted for 57.3% of primary private residential purchases valued between HKD 10 million and 20 million; 64.3% for those between HKD 20 million and 50 million; and 69.7% for those over HKD 50 million. In other words, the trend shows that "the higher the amount, the greater the proportion of mainland buyers."
Regionally, Hong Kong's Kai Tak area became the most favored district among mainland buyers, with a registered transaction value of HKD 18.4 billion, far exceeding the HKD 9.72 billion in the second-place Wong Chuk Hang/Deep Water Bay area. These were followed by the Central and Western District, Ho Man Tin/Kings Park area, and North Point area.
Zhang Lin stated that she and several friends chose to buy property in the Kai Tak area because the district offers a new urban landscape, a good living environment, comprehensive school facilities, and strong development potential.
Li Yujia believes that an important characteristic of this round of mainland buyer entry into the market is that "real demand dominates." "Whether it's the self-use demand brought by talent inflow or the long-term allocation by high-net-worth individuals, it differs from the previous stage dominated by short-term speculation."
━━━━ Property prices expected to rise 10%~15%
Regarding the outlook for the Hong Kong property market in 2026, Ma Tai-yeung holds a relatively optimistic view. He predicts that property prices are expected to rise by another 10% to 15%. Primary market transactions could increase to 21,000 units, while secondary market transactions might reach around 50,000 units, bringing the total annual residential transaction volume to 71,000 units, achieving a fourth consecutive year of growth. He also mentioned that mid-to-high-priced properties are expected to see catch-up growth, and super-luxury properties could perform even better.
"Hong Kong has once again returned to the top spot globally for IPO fundraising. The financial market is active, leading to a recovery in employment and income in related industries. The positive performance of the stock market creates a wealth effect, with some funds flowing into the property market. Coupled with continued interest rate cuts, rising rents, and stabilizing property prices, residential rental yields remain attractive. Both long-term and short-term investors will continue to position themselves in the property market," Ma Tai-yeung stated.
A report from the international investment bank Morgan Stanley also noted that Hong Kong residential prices had accumulated a 30% decline since 2018, bottomed out and rose by 5% in 2025, and have begun an upward cycle. The report anticipates a further 10% price increase in 2026, with additional gains in 2027.
For mainland clients who are still观望, Ma Tai-yeung advises: "Focus on small to medium-sized units with a total price between HKD 4 million and 8 million. These properties have high liquidity and are suitable for first-time homebuyers or investment for rental income. Also, pay attention to newly developed estates or properties along railway lines, which offer convenient transportation, well-developed amenities, and high potential for appreciation."
Furthermore, with the potential for further interest rate cuts in the U.S., asset prices may rise. Prospective buyers are advised to take advantage of the current lower market levels, view more properties, make plans early, and accelerate their decision-making to enter the market.