Hong Kong's residential property market experienced a full recovery in 2025, according to the latest official data. This rebound occurred against a backdrop of a robust local economy. The market benefited from strong performance in Hong Kong's financial sector and a reduction in interest rates, which contributed to positive market sentiment and a significant rebound in sales activity.

Following three consecutive years of decline, residential prices recorded a modest increase. Transaction volumes rose to a four-year high. Throughout the year, rental performance continued its positive trend.

In contrast, the non-residential property market remained soft, though market sentiment showed signs of improvement. Transaction volumes for all categories increased substantially, while the annual declines in both prices and rents narrowed.

In the residential sector, a key government measure in February 2025 helped boost market sentiment. The value threshold for properties subject to a symbolic stamp duty of HK$100 was raised to HK$4 million. This move helped stabilize the residential sales market in the first quarter. Furthermore, propelled by a strong local stock market and lower interest rates, residential prices regained upward momentum towards the end of the year. Comparing the fourth quarter of 2025 with the same period in 2024, prices saw a modest increase of 2.5%.

The total number of transactions in both primary and secondary sales markets increased to 62,832 in 2025, an 18% rise from the previous year. The proportion of transactions involving properties priced below HK$4 million within the overall transaction volume increased.

Driven by strong demand from new arrivals, including individuals entering through various talent admission schemes and non-local students pursuing tertiary education, the rental market performed well throughout the year. Comparing the fourth quarter of 2025 with the same period in 2024, residential rents increased by 4.1%. The market yield for all types of residential properties saw a slight increase by year-end, ranging between 2.4% and 3.7%.

The completion volume of private residential units in 2025 was 18,448, a 24% decrease from 2024. The majority of these were small to medium-sized units. The number of units occupied was 19,365, 12% higher than in 2024. The vacancy rate at year-end stood at 4.3% of the total stock, equivalent to 56,081 units. Forecasted completion volumes for 2026 and 2027 are 16,975 and 15,362 units, respectively.

Regarding the office market, sentiment generally improved due to lower interest rates, expansion in the financial and professional services sectors, and the establishment or expansion of operations by major technology companies in Hong Kong. Office transaction volume surged by 71% in 2025 compared to the previous year. However, the substantial supply accumulated over recent years continued to exert pressure on the market.

Comparing the fourth quarter of 2025 with the same period in 2024, the overall decline in office prices narrowed to 13.6% for the year. During the same period, prices for Grade A, Grade B, and Grade C offices fell by 11.9%, 18.1%, and 12.8%, respectively. Overall office rents also decreased by 3.2% year-on-year, with Grade A, Grade B, and Grade C rents declining by 4.0%, 2.6%, and 1.7%, respectively.

Office completions surged to 299,200 square meters in 2025. Grade A office completions accounted for 289,200 square meters, with 182,100 square meters located in Yau Tsim Mong. In 2025, only Central and Western District and Yau Tsim Mong provided a combined 10,000 square meters of Grade B office completions, while there were no completions for Grade C offices. The overall vacancy rate at year-end rose to 17.6% of the total stock, equivalent to 2,385,700 square meters. Vacancy rates for Grade A, Grade B, and Grade C offices were 18.4%, 17.4%, and 12.9%, respectively. The vacancy rate for Grade A offices in core districts ranged from 11.1% to 18.5%, with Tsim Sha Tsui and Central recording lower rates.

Forecasted office completions for 2026 and 2027 are 142,700 square meters and 125,000 square meters, respectively. In 2026, Wan Chai is expected to contribute the largest share of Grade A office completions, accounting for 58% of the projected total of 108,100 square meters. In 2027, Yau Tsim Mong is projected to provide the most Grade A office space, constituting 60% of the forecasted 78,100 square meters. Forecasted completions for Grade B offices in 2026 and 2027 are 34,300 square meters and 46,900 square meters, respectively. For Grade C offices, completions are forecast at 300 square meters in 2026, with none expected in 2027.

Focusing on private residential completions in 2025, the 18,448 units represented a 24% decrease from the prior year. Kowloon and the New Territories accounted for 49% and 36% of the completions, respectively, with the remaining 15% located on Hong Kong Island. Kowloon City supplied the most units, accounting for 28% of completions, followed by Sai Kung at 11%, with Sham Shui Po and Tai Po each contributing 9%.

Forecasted private residential completions for 2026 and 2027 are 16,975 and 15,362 units, respectively. In 2026, new supply will be concentrated primarily in the New Territories, accounting for 58% of the forecast total. Within this, Tai Po is expected to contribute 19% of new units, and Sai Kung 15%. In 2027, the New Territories will continue to be the primary supply region, accounting for 51% of forecast completions. By district, Kowloon City is projected to provide 34% of the completions, followed by North District and Tuen Mun, contributing 19% and 18%, respectively.

Residential prices experienced a slight decline in the first quarter of 2025. However, following the government's announcement of the raised stamp duty threshold, which stimulated pent-up demand, prices began to rise from the second quarter onward. Supported by strong local economic growth, a robust stock market, and lower interest rates, residential prices maintained their upward momentum through year-end, resulting in a modest 2.5% increase when comparing the final quarter of 2025 with the same period in 2024.

The rental market continued to benefit from inbound talent and student housing demand. Residential rents increased steadily throughout 2025, with rents in the final quarter rising 4.1% compared to the same quarter a year earlier.

Looking ahead, national stability and high-quality development, coupled with the Hong Kong SAR government's commitment to aligning with the national "15th Five-Year Plan" through innovative thinking, are expected to bolster Hong Kong's economy. Efforts to expand economic capacity and drive growth by leveraging local advantages are anticipated to provide a solid foundation for Hong Kong and its property market, helping to buffer against uncertainties arising from a complex and volatile global environment.