Entering mid-to-late May, property market sentiment continues to improve. This week, the Eva Property Index (EPI) stood at 118.86 points, up 0.23% week-on-week (WoW), marking a two-week consecutive rise. Year-to-date, property prices have accumulated an increase of approximately 4.76%. However, there remains a gap of about 18.45% compared to the historical peak of 145.76 points recorded in August 2021.
The primary market's performance continues to dictate secondary property price trends. This week, property prices across the four major districts recorded three declines and one increase. Prices in Kowloon, Hong Kong Island, and New Territories East were under slight pressure, primarily due to a lack of large-scale new projects in certain areas, coupled with a slowdown in the absorption of unsold inventory. This lack of market focus dampened secondary transactions in these three districts. In contrast, New Territories West benefited from the robust sales of the new Tsuen Wan project, Lime Spark. A large number of prospective buyers who failed to secure primary units returned to the secondary market, stimulating local transactions. This provided substantial support for property prices in the district, with the increase sufficient to offset the declines in the other three districts, thereby driving the overall index higher.
Regarding the rental market, the Eva Rental Index (ERI) rebounded this week, halting its decline to reach 119.08 points, a WoW increase of 0.61%. Not only did it break through the historical high of 118.54 points set in August 2019, but it also stabilized above 119 points for the first time on record. With the onset of the traditional peak leasing season, market demand for rentals is robust. Coupled with the continuous emergence of high-priced leasing transactions, rents have been driven steadily upward, pushing the index to new record highs.
Looking ahead, developers' strategies of launching projects at market prices and the US Federal Reserve's interest rate movements remain the key factors guiding property prices. Notably, as rental yields gradually approach or even surpass mortgage rates, the incentive to "buy instead of rent" is increasing. This builds substantial defensive strength for the property market and has the potential to attract long-term investment capital. On the rental front, benefiting from mainland professionals and students entering the market early and renting with lump-sum prepayments, along with the approaching traditional summer peak season, rigid housing demand will further expand. It is expected that both overall property prices and rents will maintain a steady upward trajectory.
District Property Prices See Three Drops and One Rise; Robust Sales of Lime Spark Drive New Territories West to Outperform
The district property price indices recorded three declines and one increase this week. Kowloon and Hong Kong Island ended their respective one-week and three-week rising streaks, reporting 118.85 points and 108.27 points, down 1.77% and 0.47% WoW, respectively. New Territories East fell for the second consecutive week, reporting 116.18 points, down 0.39% WoW. Conversely, New Territories West ended a two-week decline, reporting 122.45 points, up 0.65% WoW, making it the only district to record an increase this week. District property prices were generally under pressure this week, mainly due to slowing primary transactions in most areas, prompting secondary owners to widen negotiation margins to promote sales. Meanwhile, the ideal sales performance of the new project Lime Spark in New Territories West became the recent market focus.
Price trends in Kowloon were dominated by the primary market, though sales performances varied across projects. The MIAMI QUAY series, Phase 2 of Highwood, and KT Marina series recorded between 17 and 46 transactions respectively. However, the previously highly anticipated Phase 3 of One Victoria Cove sold only 22 out of 58 units in its third round of sales; together with other remaining stock, it recorded a total of 28 transactions, reflecting a slightly weaker performance. As primary transactions in the district slowed, some secondary owners widened their negotiation margins to increase attractiveness, putting pressure on property prices.
Regarding the market outlook, Phase 2 of Highwood released its price list No. 6 on May 19, offering 50 units at an average discounted price of $22,748 per square foot, approximately 1.38% higher than the previous price list. Excluding factors such as views and floor levels, this represents a launch at market price, with 35 of these units already launched for sale on May 23. Furthermore, Lai Sun Development's new project on Broadcast Drive in Kowloon Tong has been officially named MOUNT BROADCAST, providing about 46 units ranging from three- to four-bedroom double-ensuite layouts and detached houses, expected to be launched as early as this quarter. This reflects developers' continued confidence in the absorption capacity of prime urban locations and their readiness to launch projects.
Primary sales on Hong Kong Island remained stable, primarily supported by 32 transactions at Phase 4B of La Montagne. The primary market failed to stimulate secondary transactions, thereby putting pressure on overall property prices. Looking ahead, PORTO released its price list No. 5 on May 20, offering 18 units at an average discounted price of $28,057 per square foot, about 5.16% higher than the previous list. However, the actual increase for similar unit types was at most 2.39%, representing a launch at original and market prices. Developers are maintaining a market-price strategy to test market absorption.
In New Territories East, primary transactions slowed due to the lack of large-scale new project launches; during the period, La Mirabelle I recorded 17 transactions. Lacking a market focus in the district, secondary absorption capacity weakened, and owners' negotiation margins widened, leading to a slight decline in property prices.
Property prices in New Territories West rose against the market trend, mainly driven by the new project Lime Spark in the district. The project's second round of sales saw all 121 units sold out, and the developer subsequently raised prices by about 2.6% for the next batch. The Gold Coast Bay series in the same district also recorded 9 transactions. Seeing robust market demand, secondary owners in the district generally held firm on their asking prices, driving property prices upward.
Victor Chung, Senior Area Sales Manager at Midland Realty, pointed out that the first two sales rounds of Lime Spark received over 5,000 registrations. Many unsuccessful prospective buyers subsequently turned to the secondary market, driving a 15% WoW increase in secondary viewing appointments in the Tsuen Wan district this week. The district has recorded about 90 secondary transactions so far in May. In mid-to-late May alone, this group of buyers entering the market accounted for about 20% of transactions during the same period. He stated that recent active trading has led many owners to become more reluctant to sell. In mid-to-late May, the volume of secondary listings in Tsuen Wan decreased by 30% compared to the beginning of the month, with about 10% of owners even suspending their sales. This contraction in supply further supported property prices.
Chung added that the decline in fixed deposit interest rates has made residential rental yields relatively attractive, prompting some capital to shift into the property market for wealth preservation. Currently, owner-occupiers and upgraders account for about half of the buyer base, investors make up 40%, and mainland professionals account for 10%. He expects that due to massive demand for owner-occupation and wealth preservation, even if future interest rates remain stable or rebound, the impact on property prices will be limited.
Synthesizing this week's data, district property market trends diverged. New Territories West benefited from the robust sales of a large-scale new project in the district, with returning prospective buyers stimulating secondary transactions. Meanwhile, primary transactions in Kowloon, Hong Kong Island, and New Territories East relatively slowed, and secondary market absorption capacity slightly weakened, leading to short-term pressure on property prices.
Alex Cheung, Data Researcher at 28Hse Limited, analyzed that current market purchasing power tends to flow towards attractively priced primary projects. Looking ahead, developers' pricing strategies and the US Federal Reserve's interest rate decisions remain key to guiding the broader market. Notably, as rental yields gradually catch up to or even exceed mortgage rates, this "cheaper to buy than rent" phenomenon will provide substantial defensive strength for the property market, attracting long-term investors. It is expected that the overall EPI will continue to rise steadily in the short term, fluctuating between 112 and 124 points.
Rental Index Rises 0.61%, Breaking 2019 Record High; All Four Major Districts Show Positive Trends
Entering the traditional peak leasing season, robust market demand for rentals has driven rents steadily upward. This week, the ERI rebounded, reporting 119.08 points, up 0.61% WoW. This resumes the upward momentum seen prior to last week and breaks the historical high of 118.54 points set in August 2019, stabilizing above 119 points for the first time on record.
Regarding district performance, rents across all four major districts trended upward. The Hong Kong Island index reported 127.09 points, up 1.14% WoW, ending a three-week decline, primarily driven by high-priced rental transactions in individual estates. Taking FINNIE in Quarry Bay as an example, a mid-floor Unit A one-bedroom apartment with a saleable area of 245 square feet was leased for $18,500 per month, translating to approximately $76 per square foot. This exceeds the 90-day average of $66 per square foot shown by 28Hse data. Ideal rental yields further support the upward trend in district rents.
In the New Territories, the New Territories East index reported 122.82 points, up 0.63% WoW, rising for the second consecutive week. The district continued to record rental cases involving mainland students. For instance, a two-bedroom unit in Golden Lion Garden, Tai Wai, was leased by two mainland students who prepaid a full year's rent in a lump sum at $16,400 per month, reaching $54 per square foot, higher than the 28Hse 90-day average of $47. In addition, a mid-floor Unit D in Block 3A of SAVANNAH, Tseung Kwan O, with a saleable area of 448 square feet and a two-bedroom layout, was leased for $21,500, or $48 per square foot, slightly above the platform's statistical average of $47. The emergence of such high-priced leasing cases propelled the steady rise of the New Territories East rental index this week.
The New Territories West index reported 137.1 points, up 0.19% WoW, halting last week's decline. Chung noted that Tsuen Wan district boasts a superior geographical location and comprehensive transport facilities, offering convenient access to urban areas and the airport. Since the completion of estates like City Point over a decade ago, premium properties in the district have continued to attract tenants from other districts, with this customer base increasing by 20% to 30% year-on-year.
He added that, benefiting from the Tuen Ma Line and public transport networks, direct access from Tsuen Wan to Lingnan University and Hong Kong Chu Hai College has expanded the district's rental demand beyond the traditional peak season of May to August. Currently, over 10% of professionals or mainland students choose to prepay a full year's rent in the district each month. This stable customer base drives rents steadily upward.
The Kowloon index reported 125.72 points, up 0.07% WoW, rising for the second consecutive week. The rent increase in the district was primarily driven by active trading. Estates such as Parc Palais in Ho Man Tin recently recorded rental transactions with rents stabilizing at around $48 per square foot and rental yields reaching 6%, higher than the $45 per square foot and 2.7% yield reflected by 28Hse. Substantial housing demand and ideal returns serve as crucial factors supporting rents in Kowloon.
Looking ahead, Cheung revised his short-term ERI forecast upwards, expecting the index to operate at high levels between 114 and 124 points in the near term. As the summer peak leasing season unfolds, market rental demand and transactions are expected to increase. Having broken through the 2019 historical high, rents are anticipated to continue seeking new peaks. In the long run, actual housing demand will drive overall rents steadily upward this year, with an estimated full-year increase ranging from 2% to 4%.
The above indices reflect market conditions from May 15, 2026, to May 21, 2026.
