Hong Kong's residential property market is showing signs of recovery, with analysts predicting a significant rebound in home prices. Bloomberg Intelligence forecasts a substantial 19% rise in secondary-home prices over 2026 and 2027, driven by factors such as strong demand from mainland Chinese buyers, limited supply, and robust rental growth.

Developers have shifted from aggressive discounting to more assertive pricing strategies. Average prices in new development projects have already increased by approximately 15% from their low points over the past four years, with some highly sought-after units seeing up to 30% price hikes. The Kai Tak development area has experienced the strongest recovery, with new launches now priced above HK$23,000 per square foot for higher-quality units.

While interest rate hikes could moderate growth, the overall trend is upward. The price index for private domestic units saw a 10.5% year-on-year increase in April, and home prices climbed 5.6% from January to April. Sales volume and transaction value have also surged significantly compared to the previous year. S&P Global Ratings forecasts up to 10% home price appreciation in 2026, with growth rising to 3% in 2027. Morgan Stanley has raised its 2026 estimate to 12%, expecting another 5% increase the following year. Factors contributing to this positive outlook include the strengthening renminbi, lower mortgage costs, declining inventory, and inflows of capital and talent from the Chinese mainland.