According to Savills' latest report, "Hong Kong Property Market Review 2025 and Outlook for 2026," published today (January 12), Hong Kong residential property prices had accumulated an increase of approximately 1.8% by October last year. Full-year residential transaction volume for 2025 is projected to reach around 62,000 units.
The company's Executive Director and Head of Hong Kong Research, Teresa Tang, anticipates that the increase in Hong Kong residential property prices in 2026 will be contained within 5%. She noted that last year, the residential market benefited from a sustained low-interest-rate environment and the wealth effect generated by a strong stock market, leading to a consistently positive overall market sentiment that helped prices stop declining and begin to rise within the year.
Transaction volume in 2026 is expected to be similar to this year's level, which will provide support for property prices.
Savills Hong Kong's Managing Director, Joseph Liu, stated that the office market showed a significant rebound towards the end of last year. Net absorption in the fourth quarter reached approximately 984,000 square feet, driving the full-year 2025 absorption to about 1.6 million square feet, a seven-year high.
The banking and financial sector continued to be the primary driver of new leasing demand. Rents in Central rose by about 1.9% quarter-on-quarter, while overall office rents recorded a quarterly increase of approximately 0.4%.
Looking ahead to 2026, overall office rents are forecast to fluctuate narrowly, within a range of a 1% decline to a 1% increase.
Regarding the retail market, with the recovery in visitor arrivals to Hong Kong, retail sales sentiment improved in the fourth quarter of last year. Central recorded several new leasing deals, primarily from banks, financial institutions, and high-end skincare brands.
During the period, the overall vacancy rate for retail properties decreased to about 5.9%. It is anticipated that overall retail rents could rise by approximately 2% to 3% in the first half of 2026.
The logistics property market continues to face pressure. Despite some growth in overall trade performance, leasing demand remains weak. The vacancy rate for high-quality warehouses rose to about 11.2% in the fourth quarter of 2025, a post-pandemic high, while rents fell by another approximately 3.4% quarter-on-quarter.
Overall logistics property rents are predicted to decrease by about 7% in 2026.
Savills Executive Director and Head of Hong Kong Capital Markets, Kenneth Ko, pointed out that in the capital markets, investment sentiment improved markedly in the fourth quarter as interest rates fell and asset prices became more attractive.
The total value of individual property transactions exceeding HK$100 million surged to approximately HK$19.1 billion, a significant quarterly increase of about 115%, with office properties accounting for roughly 87% of the quarter's total transaction value.
For the full year 2026, the total value of property investment transactions is forecast to be around HK$40 billion.