The Hong Kong real estate market has experienced notable fluctuations recently, with substantial declines reported following the government’s removal of market curbs.
According to Centaline Property Agency, the total value of residential properties decreased from HK$9.5 trillion (approximately US$1.15 trillion) before the easing of restrictions to HK$8.99 trillion in January 2025. This reflects a loss of US$61.7 billion, raising concerns among industry observers about the future stability of the market.
The eased curbs included the withdrawal of the Buyer’s Stamp Duty which had previously targeted non-permanent residents, as well as the New Residential Stamp Duty for second-time buyers. Homeowners were also exempt from paying the Special Stamp Duty if they sold within two years. The immediate aftermath of these changes saw transactions surge, with first and second-hand markets recording averages of 5,387 deals per month during the second quarter—nearly 90% higher than the 2,873 transactions averaged the previous quarter, highlighting the impact of policy shifts on market activity.
Louis Chan Wing-kit, CEO of Centaline Property Agency, noted the initial success but tempered the enthusiasm with caution. "Transactions rose immediately, recording nearly 90 percent higher than the previous quarter," he explained. This renewal of activity, described as promising at first, proved short-lived as the third quarter observed transaction numbers fall to 3,017 on average per month.
Attempting to bolster the market once again, the Hong Kong government announced additional relaxations to mortgage policies and included property investment within the New Capital Investment Entrant Scheme (CIES). These decisions led to another rise, with fourth-quarter transactions averaging 4,554 per month.
Despite this uptick, challenges remain evident as market observers closely monitor trends to gauge the sustainability of these new conditions. A stark reminder of the underlying volatility was outlined when properties, after bolstering initially, faced what some analysts described as inevitable correction. The once buoyant climate seems to have cooled rapidly as the market reflects on the broader economic challenges.
While the residential property sector contends with various uncertainties, the financial health of institutions like HSBC, which cater to both corporate and retail banking, paints part of the broader economic picture. HSBC reported impressive growth within its Hong Kong division, posting a 9.4% increase to HK$92.74 billion (around US$11.89 billion) in pre-tax profits over the year. This growth points to rising consumer confidence and resilience, even amid property market challenges.
The banking giant saw nearly 800,000 new wealth and personal banking customers join its ranks, including over 234,000 secured just within the last quarter. This influx may suggest increasing demand for financial products as individuals seek out stability during uncertain times.
Overall, the tale of Hong Kong’s real estate market is one of sharp contrasts—between upticks and drops, between optimism followed by caution. Industry leaders are likely to keep their ears to the ground, sensing how policy decisions and economic signals will influence the market as it adapts to changing conditions.
Analysts and stakeholders are awaiting clarity on whether the market will stabilize or continue to struggle, as they also keep watch on lending policies and potential policy shifts from government officials who have already shown flexibility.
Only time will tell whether this brief glimpse of recovery can translate to lasting health for the Hong Kong property sector or whether it is yet another fleeting phase in a more complex narrative.