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Hong Kong Home Prices Rebound for Sixth Consecutive Month

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  Published in House and Home on Sunday, December 28th 2025 at 23:53 GMT by Channel NewsAsia Singapore

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Hong Kong Home Prices Rebound: A Sixth Month of Gains Signals Market Revival Amidst Easing Restrictions

Hong Kong’s notoriously volatile property market is showing surprising resilience, with residential home prices recording their sixth consecutive month of gains in April, defying earlier predictions of a prolonged downturn. According to data released by the Centa-City Leading Property Index, prices rose 0.7% last month, extending a recovery that began in October 2023 and suggesting a significant shift in market sentiment after years of declining values and government intervention. This rebound signals a potential turning point for Hong Kong’s economy, which is heavily reliant on the property sector.

The current upward trend follows a period of considerable pressure. As reported by Reuters (linked within the CNA article), prices had plummeted nearly 30% from their peak in late 2021 due to factors including rising interest rates, economic uncertainty stemming from the COVID-19 pandemic and stringent government cooling measures aimed at curbing speculation and affordability concerns. These measures, which included stamp duties and loan restrictions, were designed to prevent runaway price increases that had priced many locals out of homeownership.

However, a combination of factors is now contributing to this renewed optimism. The most significant catalyst has been the gradual easing of these very same cooling measures by the Hong Kong government. In February 2024, authorities scrapped all stamp duty for first-time homebuyers and reduced duties for subsequent purchases, effectively stimulating demand and making homeownership more accessible (see details on these policy changes here: [https://www.channelnewsasia.com/business/hong-kong-axes-all-stamp-duty-first-homebuyers-cut-taxes-others-3176908]). This move was a direct response to the prolonged slump and a recognition that overly restrictive policies were stifling economic activity.

Beyond policy changes, other elements are fueling the recovery. A weaker US dollar, which in turn has impacted Hong Kong’s currency peg, has led to lower mortgage rates, making borrowing more attractive for potential buyers. While still relatively high compared to historical lows, these rates are significantly more palatable than they were during periods of aggressive monetary tightening by the Federal Reserve. The article points out that banks have also been loosening lending criteria slightly, further contributing to increased buying power.

Furthermore, a sense of renewed confidence in Hong Kong's economic outlook is playing a role. After experiencing significant disruption due to pandemic-related border closures and political uncertainty, the city is slowly regaining its footing as a global financial hub. The return of international businesses and talent, alongside improved tourism figures, are contributing to a positive sentiment that extends to the property market. The government's efforts to attract foreign investment and promote Hong Kong’s unique advantages – including its legal system and proximity to mainland China – appear to be bearing fruit.

However, experts caution against declaring a full-blown recovery just yet. While the six consecutive months of price increases are encouraging, the overall market remains fragile. The volume of transactions is still below pre-pandemic levels, suggesting that the rebound isn't driven by frenzied speculation but rather by pent-up demand and cautious optimism. Some analysts believe the current gains may be partially a “catch-up” effect after prices were significantly depressed for an extended period.

The Centa-City Leading Property Index, which tracks prices of small to medium-sized apartments in Hong Kong's popular districts, is being watched closely as a key indicator of market health. Its performance reflects the sentiment of a significant portion of buyers and sellers. While the current index reading suggests improvement, it remains well below historical peaks.

Looking ahead, the trajectory of Hong Kong’s property market will depend on several factors. Continued economic growth, stable interest rates, and further government support are crucial for sustaining the recovery. The performance of mainland China's economy is also a key consideration, given Hong Kong's close ties to its northern neighbor. Any significant downturn in China could negatively impact Hong Kong’s overall economic outlook and potentially dampen property market enthusiasm.

Finally, while affordability remains a persistent challenge, the easing of stamp duty has undoubtedly provided some relief for prospective homebuyers. The long-term impact of these policy changes will be closely monitored as Hong Kong navigates this delicate period of recovery in its crucial real estate sector. The key now is to balance supporting market stability with ensuring that homeownership remains attainable for a wider segment of the population.

This article attempts to capture the essence of the Channel NewsAsia report, providing context and elaborating on the factors driving the current trends while acknowledging potential risks and limitations.