Hong Kong residential transaction volume up 19% to 22,156 in Q2

And new home sales rose 26%.

Hong Kong's residential market maintained strong momentum in the first half of 2026, with transaction volumes, home prices and luxury sales all rising, although Knight Frank expects price growth to moderate in the second half as the market rebalances.

According to Knight Frank, total residential transactions increased 19% quarter-on-quarter to 22,156 in Q2 2026, driven by a particularly active first-hand market. New home sales rose 26% from the previous quarter to 6,997 transactions as buyers responded strongly to new project launches and developers' proactive sales strategies.

Knight Frank said mass residential prices continued to strengthen, rising 7.6% year-to-date and 12.5% year-on-year in May. However, the consultancy noted that the Chinese mainland government's new outbound investment regulations could temporarily weigh on near-term market sentiment, with price growth expected to moderate in the second half as conditions normalise following the strong first-half performance.

Developers launched 13 new residential projects during Q2, adding 5,186 units. Three Kai Tak developments contributed more than 1,700 units, while phases of the One Victoria Cove redevelopment supplied more than 900 units. Knight Frank said demand remained strong across both premium sea-view developments and more affordable projects in older urban districts. Phase 1 of One Victoria Cove recorded a complete sell-out of all 360 units released, while the consultancy expects demand for prime homes to gradually spill over into lower-tier alternatives, supporting a more balanced market.

The luxury residential sector also strengthened, with 120 transactions above HK$78 million (US$10 million) recorded during the quarter, up 25% quarter-on-quarter. Knight Frank highlighted the sale of a 1,608 sq ft four-bedroom apartment at Central Residence by the Park for more than HK$103 million, or over HK$64,000 per sq ft.

The residential leasing market also remained firm. Knight Frank said mass residential rents increased 5.1% year-on-year and 1.7% year-to-date in May, supported by demand from young mainland Chinese professionals. Traditional luxury residential districts also performed well, with the Knight Frank Luxury Residential Rental Index rising 6.3% year-to-date by the end of Q2. The consultancy expects strong leasing demand during the peak rental season for well-located new developments and homes near university precincts.

On the supply side, Knight Frank noted that only one site was awarded under the Government's Land Sale Programme during Q2, with an estimated capacity of 1,332 units. More than 10,000 units are expected to be released through land disposals in Q3, mainly from railway property developments and the Hung Shui Kiu/Ha Tsuen pilot area project. According to Knight Frank, this reflects a shift in the government's land disposal strategy towards larger development sites in emerging urban areas to accelerate urbanisation.

Knight Frank said developers are likely to remain cautious in releasing existing inventory given the substantial pipeline of new supply, with at least 14 projects expected to launch in the next quarter, delivering a further 2,343 units. As the market enters a rebalancing phase, the consultancy expects price growth to become more selective, with well-located and competitively priced developments continuing to outperform the broader residential market.