Hong Kong’s property market sentiment continues to improve. The Eva Property Index (EPI) has risen for eleven consecutive weeks, most recently reporting at 114.31 points, up 0.23% week-on-week. This marks the eighth straight week above the pre-“cooling measures withdrawal” low of 110.92 points. Although the index remains approximately 21.58% below the historical peak of 145.76 points recorded in 2021, it has already gained 6.9% year-to-date, reflecting sustained strengthening in market confidence. Notably, regional performance has diverged, with a “two up, two down” pattern: Hong Kong Island and Kowloon recorded gains, while New Territories East and New Territories West came under pressure.
At the same time, several international banks and consultancy firms have released forecasts for the coming year, broadly projecting a stable trajectory for housing prices, which is expected to help underpin market stability. Knight Frank, JLL, and Cushman & Wakefield all expressed optimism, estimating that home prices could rise by as much as 5% in 2026. These positive outlooks are anticipated to bolster sentiment and provide renewed confidence for the market’s development in the year ahead.
Industry observers highlight a clear split between resilient urban districts and pressured New Territories markets, largely driven by developers’ pricing strategies. Strong sales in new Kowloon projects have prompted developers to raise prices, directly boosting confidence among secondary market sellers. Conversely, the New Territories, as a major supply hub, has seen developers adopt market-aligned or even discounted pricing to accelerate sales, forcing secondary owners to widen bargaining margins to secure transactions. As a result, while the overall index has risen, regional performance remains polarized.
Rental Index Declines 0.38% as Peak Season Ends
The rental market showed signs of fatigue this week. The Eva Rental Index (ERI) closed at 116.31 points, down 0.38% week-on-week. Despite the decline, the index has still risen 2.32% year-to-date and remains only 1.88% below the historical peak of 118.54 points set in August 2019. Regional rental performance displayed a “three up, one down” pattern. With the summer leasing season ending and the “buying cheaper than renting” effect continuing to weigh on demand, overall rental levels retreated slightly.
According to 28Hse Research, the rental index is expected to consolidate narrowly between 116 and 120 points in the short term. Supported by the influx of talent and resilient local demand, rental levels retain upward momentum, with potential to retest the August 2019 peak of 118.54 points.
Kowloon Strengthens with Two Consecutive Gains, New Territories Retreat
This week’s regional housing price index reflected a “two up, two down” pattern. Kowloon recorded the strongest performance, closing at 110.82 points, up 0.27% week-on-week, marking two consecutive gains. Active transactions in KT Marina and ONE PARK PLACE prompted developers to raise prices on new launches, drawing purchasing power into the primary market. Secondary owners, encouraged by perceived market resilience, raised asking prices, driving Kowloon’s index higher.
In contrast, the New Territories came under pressure, halting last week’s upward momentum. New Territories East closed at 114.39 points, down 0.37%. Despite solid sales in projects such as Grand Seasons and Le Mont Phases II and III, developers priced units competitively to attract buyers, forcing secondary owners to expand bargaining room, which dragged prices lower. New Territories West reported 120.34 points, down 0.16%, as demand shifted to primary projects such as Grand Mayfair III. Secondary units were sidelined, compelling owners to cut prices further to remain competitive, extending the downward trend.
Market Outlook
Looking ahead, although local banks have yet to follow the Federal Reserve in cutting interest rates, easing Sino-U.S. relations and anticipated mortgage and rate incentives from banks are expected to support buying sentiment. The Eva Property Index (EPI) has already surpassed the pre-“cooling measures withdrawal” low of 110.92 points and is projected to consolidate between 107 and 116 points in the near term. Overall, housing prices are expected to trend steadily upward, with full-year gains estimated at 3% to 5%.
Rental Market Outlook: Divergent Regional Trends
With the summer leasing season fading, rental momentum softened. The latest Eva Rental Index (ERI) closed at 116.31 points, down 0.38% week-on-week, ending last week’s rise. Nevertheless, the index remains only 2.23 points (1.88%) below the August 2019 peak of 118.54 points, with cumulative gains of 2.32% year-to-date.
Regionally, the rental market showed a “three up, one down” pattern. Kowloon performed strongly at 119.23 points, up 1.37% week-on-week, marking two consecutive gains. Hong Kong Island rebounded to 125.53 points, up 1.25%, successfully reversing prior declines. New Territories West edged up 0.01% to 135.91 points, extending a three-week rally. Only New Territories East came under significant pressure, falling 2.43% to 117.25 points. Overall, while regional rental trends diverged, demand from incoming talent and local households has kept rental levels elevated.
Looking forward, although banks have not yet followed the Federal Reserve in cutting rates, rising rents near historical highs and the “buying cheaper than renting” effect may encourage some tenants to shift toward homeownership, tempering rental growth. Nonetheless, strong demand from talent inflows and local leasing needs is expected to underpin long-term rental trends. 28Hse Research forecasts the Eva Rental Index (ERI) will consolidate between 116 and 120 points over the next two months, with potential to break above the August 2019 peak of 118.54 points.
These indices reflect market conditions for the week of December 19 to December 25, 2025.
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