Latest figures from the Rating and Valuation Department showed that the SAR’s home price index rose to 323.2 in June – up 12.7 percent year on year, while the pace of growth on a monthly basis slowed to 0.3 percent.
In the first half of this year, the SAR saw a cumulative rise of nearly 7.9 percent in residential property prices.
Eddie Kwok, executive director of valuation and advisory services at property consultancy firm CBRE Hong Kong, said the rise was mainly driven by small and medium-sized units, particularly those below 700 square feet, while larger units saw more modest growth.
“Since the market bottomed out last year, smaller units have consistently outperformed,” he said.
“Developers have also been actively launching small and medium-sized units to meet market demand.”
He also expected a possible decline in residential transaction volumes over the next few months, saying the residential market is likely to enter a consolidation phase as further upside in home prices might be limited in the short term.
Kwok explained that recent corrections in the stock market might affect investor sentiment, while the mainland’s controls on outbound investment could reduce the flow of capital into the SAR’s property market.
Rents in June scaled new heights, with the rental index reaching 205.8, marking a rise for eight months in a row.
Kwok said the rental growth in the second half of the year is expected to exceed the 2.6 percent rise in the first half, leading to an expected five to eight percent rise for 2026.
“Ongoing government initiatives to attract talent, together with the steady growth in the number of non-local students, continue to support rental demand,” he said.
“Leasing activity is expected to become even more active in the third quarter of 2026, as summer is traditionally the peak season for student arrivals and corporate relocations,” Kwok added.
