Hong Kong Residential Property Prices Have Adjusted Long-Term Since 2019 Highs, Cumulative Decline of 25% to 29%
Hong Kong's real estate market has significantly adjusted since 2019, with a notable cumulative decline.
Hong Kong residential property prices have undergone a long-term adjustment since the 2019 highs, with a cumulative decline of 25% to 29%.
The secondary property price index has continuously fallen from 2022 to 2025, with some periods nearing a ten-year low, resulting in a total market value evaporation of hundreds of billions of HKD.
Commercial properties have seen even deeper declines, with Grade A office rents dropping over 40%, and vacancy rates rising to double digits.
After hitting bottom in the second half of 2025, the market began to rebound, with property prices rising approximately 7% to 8% in the first half of 2026, and transaction volumes recovering to near recent highs.
In terms of supply, the completion of private residential units is gradually declining, with an expected average of about 15,000 to 16,000 units per year in the coming years.
Market mechanisms indicate event-driven capital reallocation: high interest rates and capital outflows had suppressed demand, while falling interest rates and the return of mainland buyers supported the recent rebound; developers benefited from price reductions to deplete inventory, while owners with negative assets faced pressure.
Additionally, property prices remain approximately 19% to 28% lower than the peak in 2021.
Source: Public Information
ABAB AI Insight
The Hong Kong real estate market previously experienced long-term growth under low interest rates and capital inflows. After the social events in 2019, compounded by the pandemic, rising interest rates, and changes in capital flows, it entered a sustained adjustment period, with the longest decline since SARS.
In terms of capital flow, funds have shifted from high-leverage properties to more stable assets or have flowed out, motivated by risk aversion and yield compression. The recent decline in interest rates and the return of population have re-attracted some buyers.
Similar cases can be seen in the deep adjustments following the Asian financial crisis from 1997 to 2003, as well as price corrections in Singapore and Tokyo during policy and interest rate cycles; the current situation is transitioning from a deep adjustment to a rebalancing of supply and demand.
Structural judgment indicates a transfer of pricing power: property prices are shifting from being driven by speculation to being dominated by fundamentals and interest rates, with the mechanism being that increased supply and changes in demand structure weaken the previous scarcity premium.
ABAB News · Cognitive Laws
Adjustments after a long bull market often exceed expectations.
Interest rates and capital flows determine the bottom of property prices.
Supply contraction is the true driver of rebounds.