Hong Kong Property Market Forecast for 2025

As future home owners and investors look to 2025 - many will be interested to know where the market will likely head for Hong Kong. 

Supply and demand will continue to be the key driving force determining prices. Interest rates, long-term outlook, currency exchange, government policies and political factors will also influence valuation. 2024's low transaction rate was primarily due to a disconnect between the disparity in sellers' and buyers' respective expectations. With over 60% of property owners owning their property outright (ie with no mortgage or outstanding loans secured against the property) sellers are not under any pressure to slash prices to attract buyers. Buyers are mostly looking for bargains given the overall downward trend; by holding out they think that they can get a better price later. So buyers and sellers have been unable to agree on a mutually acceptable price to transact on thus the low number of transactions. The downward trend will likely continue in 2025 and well into 2026 in the absence of extrinsic factors or aggressive government intervention.

Developers will likely continue to price new homes aggressively to offload stock adding downward pressure. Previously buyers from China would snap up as much as half of the properties in new developments but with the economy slowing across the border this source of demand has dwindled dramatically in the last 2-3 years. Moreover moving capital from China to Hong Kong has also become more cumbersome. Interest rates for the USD is expected to remain largely unchanged in 2025 and  if that the USD/HKD remains in place Hong Kong dollar's interest rate would follow suit. This would continue weigh on the valuation of the property prices on the whole. Population invariably correlates to demand which is one of the key factors impacting valuation. Low birth rates to the extent that the overall population shrinks means that the demand for housing will be reduced. Although this had previously been counter-balanced by the quota of 150 mainland Chinese citizens /day  whom can become naturalised. In recent year his quota had not been fully filled up which has resulted in a net shrinkage of the population for the last few years. In addition there are unofficial estimates that an exodus of around half a million who had left Hong Kong in the last few years. With reduced demand, interest rates remaining largely unchanged and the general perception of further declines to come the market will continue to fall this year. 

Based on the data we track and taking into account all of the factors that will impact property prices we estimate around 15-20% for the entire year of 2025 in the absence of major extrinsic events and government intervention.