Hong Kong home prices to rise in 2026 on the back of mainland Chinese buyers, rate cut

Core Viewpoint - Hong Kong home prices are projected to increase by up to 5% in 2026, driven by mainland Chinese buyers, interest rate cuts, and a reduction in unsold new flats [1][3]. Group 1: Market Conditions - The residential property market in Hong Kong is expected to stabilize due to factors such as stamp duty adjustments and a recovering stock market [1]. - Housing prices have bottomed out, with a cautiously optimistic outlook for 2026, where capital values are expected to rise by about 5% [3]. - Lived-in home prices fell by as much as 28.4% in March 2023 from their peak in September 2021, indicating a significant downturn [4]. Group 2: Inventory and Supply - Analysts project that Hong Kong developers' inventory will return to normal levels by the end of next year, with unsold inventory expected to equal 51.3 months' worth of supply by the end of 2023 [2][5]. - Private housing supply is anticipated to normalize by the end of 2026, requiring just 44.7 months to clear the current inventory [6]. Group 3: Buyer Demographics - Approximately 30% of buyers for new home launches are from mainland China, with this figure exceeding 60% for specific projects in Kai Tak and Kowloon Station [6]. - In the luxury residential segment, over 90% of buyers for units costing at least HK$100 million (US$12.85 million) are from mainland China [7].