According to portfolio managers Tim Gibson and Xin Yan Low at Janus Henderson Investors, the Hong Kong residential property market has entered a clear recovery phase by 2025, supported by an improving macroeconomic environment, stronger household balance sheets, and a rebound in both local and external demand. As secondary housing prices and rental levels rise, residential developers are regaining pricing power, paving the way for sustained growth in earnings and asset values. The wealth effect has undoubtedly been a key catalyst in reigniting investor interest in the property market. Strong gains in the Hong Kong stock market are flowing into the real estate sector. Talent attraction programs have brought new residents, pushing rents to record highs. Interest rate cuts have reduced mortgage rates, making home ownership more attractive than renting. The residential market has already rebounded, with secondary housing prices rising approximately 10% from their low in the second quarter of 2025. Over the past 12 months, Hong Kong has been one of the top-performing real estate equity markets globally, with renewed investor interest driving significant valuation re-ratings. As property prices and rents continue to recover, developers are more likely to regain bargaining power, supporting improved profitability. Growth in earnings and asset values will further drive stock performance. As long as key fundamental supports remain in place, a positive view on the real estate sector is maintained.