Home prices in the Hong Kong Special Administrative Region are expected to rebound the most in nearly a decade in 2026, driven by strong demand from Chinese mainland buyers, limited supply and robust rental growth, according to Bloomberg Intelligence.

Secondary home prices in the city are set to rise a total of 19 percent over 2026 and 2027, BI estimated in a report. The projected 11 percent surge this year would mark the biggest gain in almost a decade, BI said.

Robust housing demand from the mainland, declining number of new builds and a hot rental market are among the factors supporting growth, analysts led by Patrick Wong said.

Mainland buyers continue to be an important catalyst for the housing market, having spent a record amount to snap up Hong Kong residential properties in the first quarter. The yuan’s appreciation against the Hong Kong dollar and the financial hub’s recent market recovery have made investing in the city more attractive to this group of buyers, according to BI.

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The projected price growth will bolster new-home sales for leading developers including Sun Hung Kai Properties Ltd, CK Asset Holdings Ltd, Henderson Land Development Co and New World Development Co, said the analysts.

Limited new supply in the city is also expected to underpin gains. New home completions are set to hit a 12-year low by 2027, BI estimates. As a result, the residential vacancy rate will likely drop to 3.5 percent, the lowest since 1990, driving up sale and rental prices.

Meanwhile, the rental market is heating up due to strong housing demand from an inflow of mainland professionals and students.

The city’s rents hit a record high last year and are set to rise further. That has created a positive spread for investors — the 3.5 percent rental yield for smaller apartments in April was higher than the 3.25 percent mortgage rate — according to BI.