Hong Kong residential sales decline 11.7% to 3,200 transactions in February

First-hand sales rose 17% to 900 transactions.

In early 2025, Knight Frank said in a report that Hong Kong’s residential market continues to grapple with declining home prices. In January, typically a slow month due to the Lunar New Year holiday, the housing price index continued its downward trend, following the drop of 0.65% MoM decline in December.

“The index reached its lowest level in eight and a half year, decreasing by 0.45% MoM, marking a nearly 28% reduction from its peak in September 2021, as reported by the Rating and Valuation Department,” the report said.

Here’s more from Knight Frank:

In February, total residential sales transactions fell to 3,200, an 11.7% MoM drop, according to the Land Registry. However, first-hand sales showed a significant uptick, rising by 17% MoM to 900 transactions after two consecutive months of decline. This increase in firsthand sales indicates improved market sentiment and a potential revival in buyer interest, particularly in response to recent policy changes.

The 2025-26 Budget announced an adjustment to the threshold for homes eligible for the HK$100 stamp duty, raising it from HK$3 million to HK$4 million. This modification is anticipated to encourage first-time buyers to enter the primary market, and we expect residential transactions to increase by 5% to 10%.

Some new developments which feature units priced below HK$4 million (or under HK$10,000 per sq ft) have successfully attracted buyer interest. Projects like Henderson’s Eight Southpark in Kowloon City and Sun Hung Kai Properties’ Yoho West Parkside in Yuen Long received overwhelming responses in their launches. Given the deep discounts, all units in these projects sold out in the initial offerings.

On the other hand, the luxury residential segment has remained resilient. The new luxury residential project in Kai Tak, The Knightsbridge, has experienced strong demand for larger units exceeding 1,000 sq ft, with prices surpassing HK$30 million. Additionally, Mont Verra in Shek Kip Mei has successfully sold three luxury mansions this year, with prices reaching over HK$50,000 per sq ft. These sales highlight a persistent appetite for high-end properties among affluent buyers, particularly as confidence in the market begins to stabilise.

As the market generally anticipates more interest rate cuts in 2025, and the Hang Seng Index has improved, home buyers have become more active, as reflected by the brisk sales in the primary market. This shift in mindset could signal a turning point for the residential market. As confidence grows, we expect home prices to bottom out in the first half of 2025, paving the way for a more robust recovery.