Stepping into May, coinciding with the Labour Day holiday, the property market sentiment in Hong Kong has turned cautious. The Eva Property Index (EPI) reported 117.91 points this week, down 0.45% week-on-week (WoW), halting the previous week's upward trend. Year-to-date (YTD), property prices have accumulated a 3.92% increase, though they remain 19.11% below the historical peak of 145.76 points recorded in August 2021.
The four major regional property price indices showed divergent trends this week, with the broader market largely dictated by the launch pace and pricing strategies of first-hand new projects. Several focus new projects, such as One Victoria Cove Phase 3, Highwood Phase 2, and Lime Spark, have successively launched their initial and additional batches, absorbing a significant amount of market purchasing power and temporarily pressuring second-hand property prices in the same districts. Conversely, in districts lacking large-scale new project launches, purchasing power has remained in the second-hand market, driving up both transaction volumes and prices.
In the rental market, the latest Eva Rental Index (ERI) reported 118.47 points, up 0.29% WoW, marking a six-week consecutive rise. The index has accumulated a YTD increase of approximately 1.3%, sitting just 0.06% below the historical peak of 118.54 points recorded in August 2019. With the traditional summer leasing peak season approaching from May to August, driven by stable housing demand, the rental index is expected to break through its historical high in the near term.
Regional Performance: Two Rise, Two Fall as New Project Pricing Dictates Second-Hand Transactions
The four major regional indices exhibited mixed performances this week, with Kowloon and New Territories West recording declines, while New Territories East and Hong Kong Island saw increases. Analysts pointed out that second-hand property prices across various districts were primarily influenced by the pace and pricing of local first-hand project launches. As multiple new projects prepare for their first round of sales next weekend (May 9 to 10), many prospective buyers have adopted a wait-and-see approach, putting temporary pressure on second-hand prices in districts with focus new projects.
Kowloon and New Territories West: Focus New Projects Absorb Second-Hand Purchasing Power
The Kowloon index ended its three-week winning streak, reporting 116.56 points, down 1.03% WoW. New Territories West also halted a two-week rise, reporting 121.68 points, down 0.47% WoW.
The pressure on second-hand prices in these two regions was primarily due to active first-hand transactions, with new projects being launched at market prices. In Kowloon, the average discounted price per square foot (sq ft) for the initial and additional batches of One Victoria Cove Phase 3 were $21,629 and $21,868, respectively, reflecting a slight price increase of 1.1% for the new batch. In the same district, Highwood Phase 2 released three price lists this week, with average discounted prices per sq ft at $20,128, $20,688, and $21,126, representing markups of 1.78% and 2.12% for the subsequent batches. In New Territories West, Lime Spark released an additional batch at an average discounted price of $17,729 per sq ft, 3.21% higher than the initial launch, while the new price list for Grand Mayfair III stood at $18,298 per sq ft, up 17.31% from the previous list. These new projects successfully captured market attention, locking up substantial purchasing power and forcing second-hand owners in the districts to widen their negotiation margins.
Regarding first-hand unsold stock, transaction volumes in Kowloon remained stable, mainly supported by the KT Marina series, MIAMI QUAY series, Victoria Voyage series, and Baker Circle Dover, with sales ranging from 7 to 44 units per project. Sales of unsold stock in New Territories West were relatively subdued, relying primarily on the 14 units sold at Gold Coast Bay – The Uppland.
Commenting on the second-hand market in New Territories West, Carlos Lam, Founder and CEO of Centerland Property Limited, noted that while property viewing volumes in Tung Chung rose by 10% during the Labour Day holiday, transaction volumes across the top 20 housing estates fell from 67 to 43 cases. He explained that as some owners adopted aggressive asking prices, buyers were reluctant to chase prices and generally opted for a wait-and-see approach while searching for bargain units. Consequently, transactions were dominated by lower-priced units, which dragged down the average transaction price in the district. Compounded by a reduction in market listings, this directly decelerated the pace of secondary market transactions.
New Territories East and Hong Kong Island: Lack of Large-Scale New Projects Drives Purchasing Power Back to Second-Hand Market
Conversely, the New Territories East index rose for the third consecutive week, reporting 117.04 points, up 0.11% WoW. The Hong Kong Island index rose for the second consecutive week, reporting 106.81 points, up 0.42% WoW.
The absence of large-scale new project launches in New Territories East this week prompted purchasing power to flow back into the second-hand market. Observing improved market absorption, some owners raised their asking prices, driving a slight increase in property values. On Hong Kong Island, although the new project PORTO released its second price list at an average discounted price of $22,942 per sq ft (approximately 2.8% higher than the initial $22,318), the market response was less enthusiastic compared to new projects in Kowloon and New Territories West. Consequently, many prospective buyers pivoted to the second-hand market to hunt for units.
In terms of first-hand unsold stock, transaction volumes in New Territories East were low, mainly supported by La Mirabelle I and the Pavilia Farm III, which recorded 48 and 8 transactions, respectively. On Hong Kong Island, unsold stock sales relied on the Headland Residences and Deep Water South Phase 6A, with transaction volumes ranging from 7 to 11 units per project.
Data also reflected an improving second-hand sentiment in these two regions. According to Midland Realty and Hong Kong Property Services data, weekend viewing appointments at two major indicator estates in New Territories East recorded 118 groups, a slight WoW increase of 0.85%. Weekend viewing appointments on Hong Kong Island reached 135 groups, up 2.27% WoW. This indicates that the holiday did not dampen buyers' desire to enter the market, and the expanded pool of second-hand buyers provided solid support for property prices.
Market Outlook: First-Hand Launch Pace to Dictate the Broader Market
Summarizing this week's trends, the property market continues to be dominated by first-hand new projects. Attractive pricing of new projects will siphon off significant market purchasing power, pressuring second-hand prices; conversely, a lack of focus new projects will benefit the second-hand market. Alex Cheung, Data Researcher at 28Hse, anticipates that developers' future launch pace, pricing strategies, and primary market sales performance will continue to dictate the broader market. Coupled with market expectations of one interest rate cut by the Federal Reserve within this year, the EPI is projected to fluctuate between 112 and 124 points in the short term.
Rental Index Up 0.29%, Rising for Six Weeks and Nearing Historical Peak
The ERI, which reflects second-hand property rental trends, rose for the sixth consecutive week to report 118.47 points, up 0.29% WoW. It has maintained a level above 118 points for two consecutive weeks. The index has accumulated a YTD increase of approximately 1.3%, sitting merely 0.06% away from the historical peak of 118.54 points recorded in August 2019. With the traditional May-to-August leasing peak season approaching and stable housing demand, the rental index is poised to break its historical high in the short term.
Regional indices exhibited divergent trends. Kowloon, New Territories East, and Hong Kong Island all recorded declines: Kowloon reported 124.02 points (down 0.63% WoW, a three-week decline); New Territories East reported 121.28 points (down 0.16% WoW, a three-week decline); and Hong Kong Island reported 127.73 points (down 0.14% WoW, a two-week decline). In stark contrast, the New Territories West rental index rebounded, reporting 137.45 points, surging 2.78% WoW.
Addressing the rental surge in New Territories West, Lam pointed out that leasing transactions in Tung Chung have remained active and stable. With the Airport's Third Runway commencing operations in late 2024 and further developments planned for 2026, the Airport Authority is progressively utilizing the capacity of the Three-Runway System. This development has generated substantial housing demand from a large influx of aircrew and airport staff, providing strong support for rents in the district.
Lam added that the overall practical rent per sq ft in Tung Chung currently ranges between $28 and $37, with rental prices in certain estates trending upwards. Citing recent transactions, a one-bedroom unit at Century Link was leased this week for $15,000, approximately 11.11% higher than the earlier asking rent of $13,500. Additionally, a two-bedroom unit at Caribbean Coast was leased for $17,000, representing a 6.25% premium over the initial asking rent of $16,000.
Looking ahead, Cheung expects the ERI to hover between 114 and 120 points in the short term. As the summer leasing peak season draws near, the market anticipates a surge in rental demand, likely pushing the index past its August 2019 historical peak shortly. In the long run, the overall rental trend is projected to remain stable and upward-sloping, with an estimated full-year increase of 2% to 4%.
The above indices reflect market conditions from May 01, 2026, to May 07, 2026.
