Hong Kong residential transactions climb 37% to 16,754 units in Q2

There were 5,955 units transacted in June alone.

Hong Kong’s residential market regained momentum in June according to a Knight Frank report, with total transactions rising to 5,955 units up 17% MoM, driven by a 28% surge in first-hand sales to 2,147 units. For Q2 2025, total residential transactions climbed to 16,754 units, marking a 37% increase over Q1. 

“The rebound is supported by improved mortgage affordability, following a decline in the one-month HIBOR, which has restored positive carry for homeowners. If interest rates remain low, mortgage repayments could become more attractive than renting, further supporting sales market recovery,” the report added.

Here’s more from Knight Frank:

Despite the rebound in transaction volume, prices remain under pressure. The private residential property price index was flat in May after a brief rebound in April. Prices are down 0.9% YTD and 6.2% YoY. However, buyer interest remains strong for properties priced between HK$12-15 million, which have attracted the highest number of enquiries. This segment is especially popular among home upgraders and families, who typically look for three-bedroom units approximately 800 sq ft. 

In the primary market, Wong Chuk Hang and Ma On Shan emerged as the most active districts during the quarter. Among the standout developments, Sierra (Phase 1B), launched in May, recorded a 97% sales rate, selling 767 of 794 units. Another notable project, Deep Water Pavilia, launched in May, sold 372 out of 447 units (83% sales rate). A highlighted transaction within this development was at a high-floor unit in Tower 1A (1,706 sq ft), was sold for HK$50,000 per sq ft or HK$85.3 million. The strong market response was largely driven by developer incentives, including flexible payment plans, attractive mortgage schemes, and rental perks, which significantly boosted buyer confidence. 

In terms of luxury residential sales, a total of 54 transactions for properties exceeding HK$78 million (US$10 million) were recorded in Q2, up 29% QoQ. The total consideration reached HK$78.5 billion, marking a 45.8% QoQ increase, indicating renewed momentum in the luxury segment.

The leasing market continues to outperform, +0.7% MoM in May and +1.4% YTD. The sustained momentum is largely driven by continued demand from non-local professionals and students. Notably, there is a growing influx of expatriates from non-finance sectors, such as supply chain and logistics companies, alongside increased local tenant mobility.

During the quarter, demand was primarily led by family tenants, with 400–500 sq ft apartments being the most sought-after. These units typically command monthly rents in the range of HK$20,000-30,000, with strong interest focused on areas such as Sai Ying Pun and Wan Chai. Looking ahead to Q3, we anticipate an increasing leasing activity from young professionals, particularly those relocating from the UK and Singapore for work opportunities.

We expect that both the luxury and mass-market rental sectors will post positive growth of 3-5% this year, underpinned by solid market fundamentals and supportive government measures. Meanwhile, the sales market is likely to see a recovery in transaction activity, although price trends—particularly in the secondary market—may remain subdued.