Entering the latter half of August, Hong Kong's residential market exhibited a pattern of gains in both prices and rents. The Eva Property Index (EPI) stood at 120.36 points, up 0.36% week-on-week and returning above the 120-point level, though it remained 17.43% below the historical peak of 145.76 points recorded in August 2021. Prices across the districts were mixed, with two rising and two declining: Hong Kong Island and the New Territories West advanced, driven largely by weak primary-market sales that redirected purchasing power towards the secondary market; Kowloon retreated as The Sterling I absorbed local purchasing power, while the New Territories East came under pressure amid a decline in viewing volumes and widening room for buyers to negotiate. Frontline agents noted that The Sterling I captured territory-wide attention and prospective buyers' purchasing power, recording substantial oversubscription while simultaneously weighing on the sales performance of other new projects—most notably Garden Regency in Kam Tin.
On the rental front, the influx of families relocating to Hong Kong for their children's education has driven leasing activity across all districts, with a succession of high per-square-foot tenancies pushing overall rents higher. The Eva Rental Index (ERI) stood at 121.67, up 0.21% week-on-week, marking its fifth consecutive weekly gain and holding above the 121 level for the third straight week. As the new school term approaches, numerous estates in the New Territories East, New Territories West and Hong Kong Island recorded above-market tenancies from overseas students, lending steady support to rents.
Looking ahead, the mainland has tightened controls on capital outflows and begun levying a 20% income tax on the offshore trust and insurance gains of its residents. As Hong Kong's property market recovery has long relied on mainland buyers, any resulting slowdown in southbound capital would likely hit the luxury segment and large-value transactions first.
District Property Prices Show Two Increases and Two Decreases; Hong Kong Island Rises by Nearly 1%
This week, district property price indices showed mixed performance, recording two increases and two decreases. Among them, Hong Kong Island performed the best, with the latest index reporting at 110.39 points, up 0.94% week-on-week (WoW), ending a two-week consecutive decline. The upward momentum is believed to stem from the sluggish sales of first-hand unsold inventory in the district this week. First-hand transactions on Hong Kong Island were mostly supported by merely 12 transactions at The Headland Residences, causing purchasing power to flow into the secondary market. Consequently, owners continued to narrow their room for negotiation, resulting in firmer asking prices.
Weekend viewing volumes also reflected the aforementioned trend. According to data from Midland Realty, weekend viewing appointments at the four major indicator estates on Hong Kong Island rose by approximately 3.15% WoW to about 131 groups. Meanwhile, Hong Kong Property Services reported that weekend viewing appointments at two major indicator estates in the district increased by about 8.7% WoW to approximately 25 groups. This indicates that prospective buyers are continuously searching for suitable listings in the market with a solid desire to enter the market, indirectly driving up property prices.
The New Territories West also advanced this week, standing at 123.65 points, up 0.28% week-on-week and marking a second consecutive weekly gain. Garden Regency launched its fifth round of sales on 15–16 August, offering 114 units in total but ultimately recording only 28 transactions, representing 24.56% of the units released. Ocean Camino contributed a further six sales of remaining stock, single-handedly sustaining the district's primary market. With new projects in the district lacking appeal, secondary-market owners have adopted a firmer stance on asking prices.
Commenting on the lacklustre fifth-round sales of Garden Regency, Fleming Lee, Associate Sales Director of Centaline Property Agency Limited, observed that The Sterling I successfully drew a large pool of prospective buyers to submit registrations, emerging as the new-launch "ticket champion" and lifting overall market sentiment. However, unsuccessful applicants who failed to secure primary units are gradually returning to secondary estates enjoying railway connectivity across various districts. This "returning purchasing power" is set to become a key factor underpinning secondary prices in the near term.
New Territories East remained under pressure, reporting at 120.7 points this week, down 0.31% WoW, marking a three-week consecutive decline. The first round of sales for Phase 1 of PALO SPRINGS in Kwu Tung North offered 100 units but sold only 46 units, representing a sell-through rate of approximately 46%, indicating sluggish sales; La Mirabelle series also recorded merely 30 transactions. Meanwhile, weekend viewing appointments at the four major indicator estates tracked by Hong Kong Property Services decreased slightly by 0.62% WoW to 161 groups, reflecting a weakened desire to enter the market. Fearing difficulties in selling at ideal prices in the future, owners widened their room for negotiation, thereby putting pressure on property prices.
Looking ahead, the developer of PALO SPRINGS raised the prices of 16 units on August 20, with 1-bedroom units seeing a price increase of 7.12% to 7.13%, and 2-bedroom units increasing by 1.17% to 1.18%. The second round of sales is scheduled to launch on August 24, reflecting the developer's confidence in the project's sales performance. The results of the second round of sales will be reflected in next week's research report.
Similar to New Territories East, property prices in the Kowloon district have fallen for four consecutive weeks, with the latest index reporting at 111.89 points, down 1.08% WoW. The performance of first-hand unsold inventory in the district was solid, successfully diverting market focus and purchasing power. For instance, the First Coast series, Cullinan Sky Phase 2, Highwood Phase 2, MIAMI QUAY I, and the KT Marina series recorded 14, 5, 5, 4, and 3 transactions, respectively. Meanwhile, following the release of its first price list on August 12 and the commencement of subscription registrations on August 13, The Sterling I temporarily recorded over 18,000 ballots after four days of collection, representing an oversubscription of more than 99 times. Consequently, the developer released an additional 78 units at original prices on August 16, with a discounted average price of HK$18,960 per square foot. Compared to the per-square-foot prices of units in the same column, the actual price increase was merely 0.2% to 0.7%. This reflects the developer's strategy of launching the project at close-to-market prices to absorb the district's purchasing power and prospective buyers' focus, thereby putting pressure on the secondary market.
In terms of secondary market transactions, according to data from Hong Kong Property Services and Midland Realty, weekend viewing appointments at the four and seven major indicator estates in the Kowloon district both recorded 170 groups, down 5.56% and 5.03% WoW, respectively. This indicates that The Sterling I successfully captured the focus of prospective buyers, causing some to temporarily suspend their secondary market viewing activities, which was accompanied by a weakened desire to enter the market and a subsequent downward impact on property prices.
Furthermore, as Mainland China tightens capital outflows and levies a 20% tax on offshore yields, the market is concerned that this may expand to include offshore employment income in the future. This could potentially slow down the southward flow of capital, posing latent pressure on luxury properties and large-lump-sum transactions in Hong Kong.
Alex Cheung, Data Researcher at 28Hse, estimates that the short-term EPI will continue to fluctuate between 112 and 124 points. The overall property market in the second half of the year is expected to remain stable or trend slightly downwards, with the actual trajectory depending on the impact of the aforementioned policies on the local market.
Rental Index Rises for Five Consecutive Weeks; District Trends Show Three Increases and One Decrease
As the start of the academic year in September approaches, Mainland students and local family tenants are successively leasing units across various districts. A series of high per-square-foot rental transactions has emerged, driving the overall rental market across Hong Kong to continue its upward trajectory this week. The latest ERI stands at 121.67 points, representing a week-on-week (WoW) increase of 0.21%. The index has risen for five consecutive weeks and remained firm at the 121-point level for three consecutive weeks. It is currently 2.64% higher than the secondary peak of 118.54 points recorded in 2019, indicating that the momentum of testing new highs remains unabated. Evidently, the pre-school-term rental demand is providing solid support for the overall rental market.
District trends exhibited three increases and one decrease. New Territories East led the gains, reporting 125.24 points this week, up 0.9% WoW, marking a two-week consecutive rise. New Territories West also recorded a three-week consecutive increase, standing at 139.37 points, up 0.6% WoW. Hong Kong Island similarly performed well, reporting 134.11 points, a marginal WoW increase of 0.08%, thereby halting last week's decline. Conversely, the Kowloon district faced downward pressure, reporting 125.41 points, down 0.45% WoW, ending its two-week rising streak. Among the four major districts, Kowloon was the sole district to falter, acting as the only drag on the overall rental growth.
The upward trend in New Territories East this week was primarily driven by multiple leasing transactions executed above market rates. For instance, a 1-bedroom unit (Flat J) on a middle floor of Tower 9 at Solaria in Pak Shek Kok, with a saleable area of 336 square feet, was leased by a Mainland male student entering the Chinese University of Hong Kong for the new academic year. With a one-year lump-sum upfront payment, the monthly rent was secured at HK$16,200, translating to approximately HK$48 per square foot. Another transaction involved a studio unit (Flat C2) on a middle floor of Tower 2, Le Mont Phase 1, with a saleable area of 236 square feet, which was leased for HK$10,900 per month, or HK$46.2 per square foot. According to 28Hse data, the 90-day average per-square-foot rents for these two estates are HK$43 and HK$45, respectively. The aforementioned transactions were both above market rates, directly pushing up the district's rental levels.
The growth in New Territories West was similarly supported by robust leasing demand from tenants of diverse backgrounds. A studio unit (Flat E) on a high floor of Tower 1, NOVO LAND Phase 1A, with a saleable area of 236 square feet, was leased by a Mainland student for HK$12,600 per month, translating to HK$53 per square foot. In Sun Tuen Mun Centre, a 3-bedroom unit (Flat D) on a high floor of Tower 10, with a saleable area of 603 square feet, was leased by three Indian flight crew members for HK$16,000 per month (HK$26.5 per square foot), favored for its convenient commute to the airport. The 90-day average per-square-foot rents for these two estates on 28Hse are HK$40 and HK$26, respectively. These above-market transaction prices served as the driving force behind the rental appreciation in New Territories West.
Lee noted that with the September school term approaching, many leasing transactions were rushed to completion before the month began. Coupled with the recent establishment of Sear Rogers International School Hong Kong in the Riviera Gardens area of Tsuen Wan, and the relocation of CCC Chuen Yuen First Primary School to its new campus within Riviera Gardens, a number of tenants have been drawn to lease units at the nearby Ocean Pride, keeping rents in the district persistently high.
The upward momentum on Hong Kong Island stemmed from concurrent leasing demand for both large and small units. A 3-bedroom unit (Flat C) on a middle floor of Tower 8, Braemar Hill Mansions, with a saleable area of 1,090 square feet, was leased by a family tenant for HK$52,000 per month. The unit rent of approximately HK$47.7 per square foot is slightly higher than the concurrent average of HK$47. Meanwhile, a low-floor 1-bedroom unit at Des Voeux W Residence, with a saleable area of 236 square feet and an adjoining 145-square-foot flat roof, was leased for HK$24,000 per month. The unit rent reached HK$101.7 per square foot, significantly higher than the concurrent average of HK$86. It is reported that this transaction marks the first time Sheung Yat has breached the HK$100 per-square-foot threshold, reflecting that the rental value of small units in the district still possesses upside potential.
The situation in the Kowloon district was the exact opposite, with individual estates recording below-market transactions, causing the district's rental levels to lose support. For example, a 2-bedroom unit (Flat E) on a middle floor of Tower 8 at The Long Beach, with a saleable area of approximately 547 square feet, was leased by a family tenant for HK$26,500 per month. The unit rent of approximately HK$48.4 per square foot is lower than the concurrent average of HK$49. Such cases, which were slightly below market rates, accounted for a larger proportion of transactions in the Kowloon district, thereby weakening the overall rental support and ultimately leading to a pullback in the district's index.
Stepping into late August, local leasing activity is expected to remain robust. Housing demand from Mainland students coming to Hong Kong for further studies remains highly resilient. As the market continues to digest available rental stock amidst a supply shortage, per-square-foot rents in individual estates are expected to test new highs again. Cheung maintains his earlier forecast, estimating that the ERI will fluctuate between 114 and 124 points in the short term, with full-year rental growth projected at 2% to 4%, and the index poised to continuously break previous highs.
The above indices reflect market conditions from August 14, 2026, to August 20, 2026.
