According to a recent assessment by CBRE Group Inc (CBRE), the actual land premium revenue for Hong Kong's 2026/27 fiscal year is projected to be between HK$14 billion and HK$16 billion. This reflects the current market environment and the government's more cautious land supply strategy.
CBRE's Executive Director and Head of Valuation & Advisory Services, Hong Kong, stated that this year's land sale program in Hong Kong is more aligned with current market realities. Even if the final revenue may not meet the target, it indicates the government is adopting a more disciplined strategy for land release, focusing on long-term market stability rather than pursuing short-term gains.
A Senior Director from CBRE Hong Kong's Valuation & Advisory Services added that the Hong Kong government has lowered its land revenue target to approximately HK$18 billion. This target should be viewed as a reasonable benchmark rather than an absolute figure. Lower final revenue would reflect both current market conditions and the government's willingness to adjust the supply pace in response to market demand. The reduction in land revenue this year should be understood in a broader context, signifying that land reserves are being managed in an orderly manner rather than being accelerated to market. What the Hong Kong residential market needs is a suitable supply of land in appropriate locations that supports sustainable development. From this perspective, the land sale arrangements for 2026/27 are more balanced and responsive to market needs.
CBRE anticipates that around seven residential sites are likely to be offered this year, with an estimated 4 to 5 of them potentially being successfully sold. Some sites continue to face persistent challenges. For instance, the Tseung Kwan O site, repeatedly listed since 2023, is still affected by planning and development constraints. The Stanley site may see limited interest from potential developer bidders due to high financing costs and the government's introduction of higher stamp duties for property transactions of HK$10 million or above.
On another front, the tender for the first pilot site development project in the Hung Shui Kiu/Ha Tsuen New Development Area closed on July 3. The bidding response, under the current challenging business environment, reflects sustained market interest in the large-scale development opportunities of the Northern Metropolis. As the inaugural project under the government's new site development model, its tender results will provide crucial reference for assessing market absorption capacity and optimizing future land tender strategies. The government is expected to launch two more site development projects in 2027, where the experience and market feedback from this pilot will help refine the design and rollout of subsequent projects.
In contrast, the Tung Chung residential site attracted strong interest as expected by the market and was sold at a price higher than anticipated, indicating developers' active pursuit of replenishing quality, medium-sized land reserves in mature neighborhoods. Meanwhile, two residential sites in Sha Tin are expected to hold certain appeal due to their convenient transportation links and solid fundamentals for mid-priced housing.
Amid a gradually recovering market and increased policy uncertainty, CBRE maintains its forecast for Hong Kong residential property prices in 2026, projecting a full-year increase of 8% to 10%. However, as prices have already accumulated an approximate 7.4% increase year-to-date, this implies relatively limited upside potential in the second half of the year. The market is expected to enter a consolidation phase, absorbing earlier gains, with price momentum likely to slow.
In comparison, the fundamentals of the residential leasing market remain robust. Supported by continued population inflow from various talent admission schemes and a steady increase in non-local student numbers, rental demand remains strong. With the arrival of the traditional summer peak leasing season and increased demand from students and corporate relocations, residential leasing activity is expected to strengthen further in the third quarter of 2026.
CBRE forecasts that full-year residential rental growth for 2026 will range between 5% and 8%, with the potential to reach new historical highs.