Hong Kong home prices may fall as much as 3% this year, while residential rents could rise to 5%, driven by interest rates, new housing inventory, and US-China trade tensions, The Standard reported Tuesday, citing Knight Frank.

The property consultancy said the home-loan-linked interbank rate has dropped to a three-year low, which could boost demand from property investors, the report said.

Knight Frank expects developers to continue price cuts to clear stock, with 17,500 unsold units currently and another 30,280 flats likely to hit the market within 18 months, The Standard added.

Rent, on the other hand, is expected to rise 3-5% this year, supported by demand from new immigrants and non-local students, the report said.

Due to ongoing uncertainty around US tariff policy, flat prices are projected to remain flat or decline by up to 3% in 2025, according to the report.

Luxury home prices are also under pressure, with those in the HK$20 million to HK$40 million range forecast to fall by up to 5%, while units above HK$40 million may hold steady, The Standard cited Knight Frank as saying.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)