Industry insiders said Hong Kong’s housing market has had a “soft landing”, as prices and sentiment rebounded on the back of lower borrowing costs, buoyant equity trading, and solid demand from Chinese mainland buyers. Overall residential prices are expected to rise more than 5 percent in 2026, some real estate agencies said on Wednesday.

The number of residential transactions rose markedly in the special administrative region. In the first 11 months of this year, Hong Kong recorded more than 54,600 private home deals, with about 18,790 in the primary market and 35,875 in the secondary market, according to Centaline Property.

The firm predicts that full-year first-hand sales will reach around 20,000 — the highest level since 2019 — and that second-hand transactions will surge to a four-year high of about 39,000.

Home prices have also posted gains year-to-date. The JLL Mass Residential Capital Value Index, a housing market gauge launched by the real estate services firm JLL, rose 1.4 percent in the first 11 months.

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Meanwhile, data from the Rating and Valuation Department indicates a upward trending among price indices for all classes of private housing, rising about 1.8 percent between December 2024 and October.

Joseph Tsang, chairman of JLL Hong Kong, said the upward movement was fueled by demand from returning mainland buyers, which picked up after the SAR government further eased stamp duty policies.

“In some estates, more than 90 percent of units were purchased by mainland buyers, which means they are a powerful force supporting Hong Kong’s residential market,” he said.

Tsang added that a strong performance in the local stock market has encouraged investors to channel capital into property, giving the housing market an additional lift.

Lower interest rates were another key driver. “With interest rates easing, more investors and renters are now encouraged to enter the market, providing positive support to both transaction numbers and property prices,” said Rosanna Tang, executive director and head of research at Cushman & Wakefield in Hong Kong.

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Both JLL and Cushman & Wakefield expect Hong Kong home prices to rise about 5 percent next year, with market sentiment continuing to improve amid a sustained low-interest-rate environment.

“Housing prices have bottomed out, and the outlook for 2026 is cautiously optimistic. We expect capital values in the mass residential segment to rise by about 5 percent, while luxury residential values will remain broadly flat,” Tsang said.

Louis Chan Wing-kit, Asia-Pacific vice-chairman of Centaline Property, agreed, saying that the improved performance in 2025 has laid a solid foundation for further recovery.

The housing market will enter “an early stage” of rebound in 2026, with multiple indicators expected to show significant improvement, Chan added.

The firm projects that overall home prices can surge around 15 percent in 2026.

However, Ricacorp Properties forecasts sustained upward movement in the local housing market. It predicts that overall home prices will rise about 7 percent, with small and medium-sized units projected to gain between 6 and 8 percent during that period.

Jiang Chenxi contributed to this story.

Contact the author at gabylin@chinadailyhk.com