Hong Kong government land sale revenues to hit HK$8-14b in 2025

And annual land premiums are expected to reach HK$10-15 billion.

The Hong Kong property market is less affected by the external environment this year; demand and supply are the major factors influencing the local market. According to Martin Wong, Knight Frank Senior Director and Head of Research & Consultancy, Greater China, with a high level of unsold inventory, developers are tasked with clearing this stock.

“As interest rates gradually decrease, we expect developers to accelerate the launch of first-hand projects and provide more incentives to attract potential buyers. It is expected that the property market will perform better in 2025,” Wong added.

Here’s more from Knight Frank:

Residential home prices are not expected to increase significantly, with mass residential prices projected to rise by no more than 5%. First-hand and second-hand transactions are expected to increase slightly to 55,000-58,000 units, reflecting a year-on-year (YOY) increase of approximately 10-15%. First-hand sales are expected to constitute  35-40% of this total, potentially marketing the highest number of first-hand transactions since 2004.

As interest rates decline, purchasing power in the market will be released, particularly supporting small-to-medium units priced at HKD 10 million or below. Due to the government's relaxation of the investment immigration programme to include residential property, transaction prices for properties over HKD 50 million are expected to rise.

In contrast, the leasing market remains slightly robust, supported by demand from talent schemes and the high-income group. We expect mass residential rents to rise by 3-5%, reaching record levels.

Due to market challenges, most government land sites will be rolled over from previous years. We estimate that the government land sale revenue in 2025 will range between HK$8-14 billion, while annual land premiums are expected to reach HK$10-15 billion.