JLL: The stock market has led property prices by more than two months over the past five years

JLL today released the "Hong Kong Residential Sales Market Overview," indicating that over the past five years, the Hang Seng Index has averaged a lead of about 2.2 months over residential capital values, showing a significant correlation between the Hang Seng Index and residential capital values. This lag is mainly due to the lower liquidity in the property market and the longer time required for transaction registration procedures.

According to market data, since June 2020, the Hang Seng Index and residential capital values have shown synchronous trends. However, starting from July 2024, the trends of the two diverged: the Hang Seng Index continued to rebound, while residential capital values did not rise in sync but showed a significant narrowing of the decline, recording a slight recovery starting in August 2025. This phenomenon indicates that, despite the differences in the volatility of the stock market and property prices, the basic directional consistency is maintained.

Li Yuanfeng, Senior Director of Project Strategy and Consulting at JLL, stated that benefiting from the strong performance of the stock market, the Hong Kong residential market is expected to receive support in the near term. The market generally anticipates further interest rate cuts in 2026, which is expected to further boost investment confidence. However, historical trends show that property price movements typically lag behind the stock market, reflecting a slower adjustment speed. Despite the gradual improvement in market sentiment, high inventory levels and ongoing macroeconomic uncertainties will still slow down the recovery pace, and the firm holds a cautiously optimistic view on the market outlook.

In fact, last year, the Hang Seng Index rebounded by 27.8% from the beginning to the end of the year. The average daily turnover of the Hong Kong Stock Exchange reached HKD 249.8 billion in 2025, a significant year-on-year increase of about 90%. The Hong Kong secondary residential market also gained momentum, with transaction volume in 2025 recording 42,292 cases, a year-on-year growth of 16.9%; the total transaction amount reached HKD 299 billion, a year-on-year increase of 14.4%.

Zhong Churu, Senior Director of the Research Department at JLL, pointed out that historical trends over the past decade show a continuous positive correlation between the annual average daily turnover of the stock market and the number of secondary residential transactions in the local market. Data shows that the activity level of the stock market and the scale of residential transactions have long maintained a high degree of synergy. The synchronous trend is mainly driven by the "wealth effect." According to the Investment Committee's statistics in the "Retail Investor Research 2023," about 58% of Hong Kong adults are stock investors, reflecting a continuously rising trend over the years. When stock assets appreciate, investors perceive an increase in net worth, enhancing financial confidence, and tend to diversify asset allocation. The capital gains generated from stock investments often convert into liquid funds and flow into tangible assets, especially residential properties, which are regarded as a preferred stable investment form in Hong Kong. In summary, although there is no direct causal relationship between the stock market and the residential market, historical data shows a high degree of linkage between the two, reflecting overall macroeconomic sentiment