Hong Kong mass and luxury residential capital values to drop by 5% this year

Meanwhile, luxury residential rents could rise by up to 5%.

In 2025, the Hong Kong housing market faces a primary challenge of oversupply, compounded by risks from the escalating US-China trade war and an uncertain interest rate outlook. In a report, JLL said it expects mass and luxury residential capital values to drop by about 5% in 2025.

“Luxury residential rents are expected to continue to rise and reach record levels as the influx of mainland Chinese families continues. We expect luxury residential rents to rise by 0-5% in 2025,” the report said.

Here’s more from JLL:

Residential sales activity continued to improve with November home sales volume reaching 6,298 units, the highest level since the lifting of cooling measures. Mass residential capital values dropped by 1.5% q-o-q in Q4 2024.

Sentiment in the primary market improved in Q4 2024, driven by the competitive pricing of new project launches. Cullinan Sky in Kai Tak sold 95% of its units in the first phase, with 895 units being snapped up across four launches in a single day.
A residential site in Shatin sells in Q4 2024

In Q3 2024, six luxury residential units were completed. These included two units at 16 Bowen Road and one unit at 28 Po Shan Road in the Mid-Levels. A total of 479 luxury residential units are expected to be completed in full-year 2024.

In October, a residential development site, STTL 625 in Shatin, was awarded to Chinachem for HKD 1.02 billion at an AV of HKD 3,357 per sq ft, which represents a 15.1% discount compared to a nearby site sold in July 2024.

Rents slip as the leasing market experiences seasonal slowdown

Luxury residential rents retreated by 0.5% q-o-q in Q4 2024, partly due to the high comparison base established in the previous quarter, along with the seasonal moderation in leasing demand. Leasing transaction volume in the luxury market fell by 45.0% q-o-q in Q4 2024.

Investment activity in the high-end segment has remained strong. In October and November, the transaction volume for properties valued at or above HKD 50 million increased by 278.6% y-o-y. Meanwhile, luxury residential capital values dropped by 3.7% q-o-q in Q4 2024.