Entering early 2026, the property market landscape continues to be dominated by the primary sector. In a bid to accelerate capital recycling, developers have widely adopted an aggressive strategy of "selling at market prices" to clear accumulated unsold units. While this pricing stance successfully absorbed market purchasing power—bringing the volume of unsold primary stock down to 18,387 units—it has directly exerted pressure on secondary home prices. Consequently, the Eva Property Index (EPI) closed at 113.46 points this week, representing a week-on-week decline of 1.16% and terminating a 12-week rising streak.
Furthermore, regional performance displayed a "three down, one up" pattern, primarily driven by new project launches priced competitively against the secondary market. New Territories East recorded the most significant decline, with the sub-index falling 2.32% as secondary trading was suppressed by the competitive initial launches of Villa Garda, the Grand Seasons series, the Shang Ran series, and SIERRA SEA Phase 2A. Similarly, New Territories West and Kowloon saw prices retreat by 1% and 0.32% respectively, as purchasing power was diverted to projects such as the Grand Mayfair series, The Paddington, and KT Marina. Conversely, the Hong Kong Island district, lacking competition from large-scale new launches, saw a relatively stable secondary market with a slight index increase of 0.18%.
Looking ahead, given that primary inventory has dropped to a two-and-a-half-year low, developers are expected to maintain their market-pricing strategy. Short-term price levels are projected to fluctuate between 107 and 118 points.
The rental market performed robustly this week. The latest Eva Rental Index (ERI) recorded 116.95 points, a week-on-week rebound of 0.79%. This reverses the volatility of the past two weeks and moves the index closer to the historical peak of 118.54 points set in August 2019, currently trailing by approximately 1.34%. Rental trends across the four districts were generally positive, presenting a "three up, one down" pattern. Although January is typically a seasonal low for leasing, the influx of population via various talent schemes, combined with sustained end-user demand from local households, has insulated the rental market from seasonal effects. Instead, the market is demonstrating strong momentum to challenge historical highs.
Primary Launches Pressure Kowloon and New Territories; Hong Kong Island Marginally Higher
This week, the district-based sub-indices recorded three declines and one increase. This primarily reflects pressure on the New Territories and Kowloon districts due to aggressive pricing strategies in the primary market, while the Hong Kong Island district bucked the trend with an increase.
New Territories East recorded the most significant decline in property prices this week, with the index retreating 2.32% week-on-week to 112.36 points, effectively erasing last week's gains. Pressure on the regional housing market is primarily attributed to intense competition from the primary market in Tseung Kwan O. Residual units at Villa Garda, the Grand Seasons series and Le Mont series have seen ideal sales performance. Furthermore, the launch of SIERRA SEA Phase 2A received an enthusiastic market response. Although the developer has released additional batches with price increases on two consecutive occasions, the overall pricing remains competitive relative to the market. The average price per square foot after discounts in the newly released Price List No. 3 stands at just $12,263. This figure remains below the transaction prices of comparable secondary listings in the same district, successfully absorbing a significant amount of purchasing power. Faced with the strength of new project launches, secondary market owners in the same district have been compelled to widen negotiation margins or reduce asking prices to maintain competitiveness, thereby dragging down regional secondary property prices.
New Territories West and Kowloon also faced downward pressure, with indices falling by 1% and 0.32%, respectively. In New Territories West, Grand Mayfair series recorded considerable transactions for their remaining stock, successfully consolidating market purchasing power. This has led to the marginalization of the secondary market, where owners’ bargaining power has been significantly weakened, causing prices to fall once again.
Meanwhile, the Kowloon district softened after a three-week rallying streak, reflecting the dilution of purchasing power by the primary market. The successful sale of residual units at projects such as the Paddington, KT Marina, ONE PARK PLACE, Uptown East, and Haddon has diverted buyer attention. Consequently, absorption capacity in the district's secondary market has weakened, making the previous upward trend unsustainable.
Among the four main districts, only Hong Kong Island bucked the trend this week. The index reported at 100.49 points, a slight week-on-week increase of 0.18%, halting its previous decline. This resilience is mainly due to the lack of large-scale focal new projects in the area. The primary market relied solely on luxury projects such as Deep Water Pavilia II and 1 South Bay Close for support. This scarcity effectively restored the bargaining power of secondary market owners, with some even able to raise asking prices, driving property values upward.
Unsold primary stock has fallen for 11 consecutive months to 18,387 units. Compared with November 2025’s 18,889 units, this represents a 2.7% decline, and a year-on-year reduction of 3,300 units from December 2024, equivalent to a around 15% decrease by year. Developers are expected to continue adopting market-price strategies to clear inventory, which may constrain secondary price growth. Short-term home prices are projected to fluctuate between 107 and 118 points. With sentiment improving and macroeconomic conditions stable, the 28Hse Research Department forecasts overall home prices to rise moderately by 3% to 5% in 2026.
Rigid Demand Counteracts Seasonal Effects; Rental Index Poised to Challenge Historical Peak
The local secondary rental market has demonstrated robust resilience. The latest Eva Rental Index (ERI) reported at 116.95 points, reflecting a week-on-week rebound of 0.79% and successfully reversing the downward trend observed over the previous two weeks. Current rental levels are steadily approaching the historical high of 118.54 points recorded in August 2019, with the differential narrowing significantly to just 1.34%. Although January is traditionally regarded as a slow season for leasing, the market trajectory has not been hindered by seasonal factors. Underpinned by the dual support of new population influx via various talent attraction schemes and substantial housing demand from local households, the market is exhibiting the momentum necessary to challenge historical highs.
Regional performance exhibited a "three up, one down" pattern, with capital clearly flowing toward urban areas and the New Territories West sector. Kowloon emerged as the top performer, rising 1.89% week-on-week to 121.91 points; having recorded gains for three consecutive weeks, it served as the primary driver for the broader market. Similarly, Hong Kong Island halted its decline to stabilize, posting a week-on-week increase of 1.26%. New Territories West demonstrated long-term strength, with the index reporting at 138.07 points, a 0.78% increase. This marks five consecutive weeks of growth, reflecting extremely strong rental absorption in the district. Conversely, New Territories East remained weak, falling another 0.87% week-on-week and marking a three-week losing streak.
Looking ahead, the rental market is primarily influenced by two countervailing factors. Firstly, a scenario where mortgage payments are lower than rental costs has emerged in certain housing estates, incentivizing some tenants to transition into homebuyers and thereby decelerating the pace of rental appreciation. However, continuous housing demand generated by various talent schemes provides stable support for the leasing sector. The 28Hse Research Department projects that the rental index will consolidate between 116 and 120 points in the short term, with a possibility of breaking the historical high within the next two months. In the long run, it is anticipated that rents will maintain a steady upward trend throughout 2026, with projected growth of approximately 2% to 4%.
The above index reflects market conditions from January 2, 2026, to January 8, 2026.
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