Macro backdrop buoys HK realty mkt

Hong Kong's residential market, driven by supportive macroeconomic conditions, stronger household balance sheets and renewed demand, has extended the recovery momentum this year and has remained resilient even as geopolitical tensions in the Middle East persisted.

Residential flat transactions in Hong Kong are usually lackluster in the first quarter of the year, as the traditional Chinese New Year long holiday pushes potential homebuyers and sellers to the sidelines.

But recent residential property market data from the Hong Kong Special Administrative Region government showed that both transaction volume and prices continued to climb in the first quarter of 2026.

A total of 18,654 residential home transactions were recorded in the first quarter, representing a quarterly increase of 9 percent and an annual surge of 53 percent, with sales of primary residential flats accounting for 30 percent of total transactions in the quarter, according to Land Registry data.

Derek Chan, the head of research at Ricacorp Properties, said primary private residential home transactions in the first quarter reached 5,374 cases, representing an annual hike of about 45 percent compared to a year ago, and marking a new high in 22 years.

And these primary residential home transactions involved a total consideration of HK$64.2 billion ($8.23 billion), a year-on-year increase of 100 percent, the most lucrative first quarter since 1996, Chan added.

Hong Kong residential property prices in February, as tracked by the private domestic price index of the Rating and Valuation Department, increased almost 1.6 percent compared to January, and also gained 7.7 percent from a year ago. In the first two months of this year, the index has edged up 2.6 percent. The rise in home prices in February was mainly driven by strong stock market performance, strong primary residential flat sales, and the release of buyers' purchasing power after the Chinese New Year holiday.

Eddie Kwok, valuation and advisory services executive director at CBRE Hong Kong, said he expects prices of mass residential flats in Hong Kong will gain 3 to 5 percent this year, while the luxury home segment will also jump by up to 5 percent in the period.

Kwok said Hong Kong residential property has remained relatively resilient and is currently either in a recovery phase or experiencing growth amid the outbreak of geopolitical tensions in the Middle East.

"We forecast full-year home prices to increase by 7 to 10 percent, and the full-year transaction numbers will reach 65,000 to 70,000 this year," said Rosanna Tang, executive director and head of research at Cushman & Wakefield Hong Kong.

Chan said the positive momentum of the Hong Kong housing market will be sustained into the second quarter of this year, as the home market is still supported by factors such as a stable economy, rising housing demand from new residents, and a stable and low interest rate.

Global bank Citi has forecast that Hong Kong home prices will grow over 8 percent this year with the momentum accelerating in 2027. This growth is driven by a 14-year low in new residential land supply, a surge in housing demand from non-local student visa approvals, and a positive wealth effect generated from the capital market.

Although tensions in the Middle East have not had any immediate impact on the Hong Kong residential home market, real estate analysts warn that if the crisis escalates it will have a negative effect.