The "Hong Kong Property" Easy Property Price Index rose 0.39% week-on-week, increasing for four consecutive weeks, while the rental index rose 0.54%

The latest E-Fang Property Price Index is reported at 116.08 points, up 0.39% week-on-week, marking four consecutive weeks of increase. The cumulative increase in property prices this year is 1.12%, narrowing the gap from the historical high of August 2021 to 20.36%. During the Lunar New Year period, transactions for remaining new units and tender projects were recorded, leading to a capital inflow into the secondary market, and it is expected that the gap between property prices and historical highs will further narrow to within 20% in the short term.

The price trends in different districts show mixed developments, with increases in urban areas and slight declines in the New Territories. The index for Hong Kong Island rose 0.34% week-on-week, mainly driven by transactions in new projects such as The Peak and Hyde Park; the Kowloon district saw a slight increase of 0.16%, with trading concentrated in projects like Park Vista and Park Hill. On the other hand, the New Territories West and East lacked large new project launches and transactions for remaining new units during the long holiday, leading to subdued secondary market activity, with indices dropping slightly by 0.01% and 0.9%, respectively.

In the rental market, the latest E-Fang Rental Index is reported at 116.91 points, up 0.54% week-on-week, ending a two-week decline, and is only 1.38% away from the historical high. Supported by the "Study in Hong Kong" policy, the relaxation of non-local student quotas, and regular housing demand from local families, it is expected that rents will stabilize in the short term between 114 and 120 points.

Looking ahead, new projects such as Phase 13 of Sun Hung Kai Properties' Ocean Bay, the remaining phases of South Island, and Yunxiang are set to be launched after the holiday. Even if the new budget maintains existing measures or raises the stamp duty on luxury homes, the overall impact on the property market is expected to be limited. Overall trading is anticipated to remain stable, with the property price index hovering between 112 and 120 points in the short term, and a gradual upward trend expected in the medium to long term, challenging the high levels of 2021.

Additionally, benefiting from the increase in the cap for non-local undergraduate students at the eight funded universities from 40% to 50% starting this academic year in September, the latest E-Fang Rental Index is reported at 116.91 points, up 0.54% week-on-week, ending a two-week decline. The index has hovered around 116 points for 15 consecutive weeks, only 1.38% away from the historical high of 118.54 points, reflecting a gradual digestion of seasonal factors in the rental market, with rental trends continuing to improve.

The rental performance in the four major districts shows two rising and two falling. The New Territories West performed the best, with an index of 136.11 points, up 1.99% week-on-week, marking two consecutive weeks of increase; the Hong Kong Island district also stabilized, reporting 120.05 points, up 0.39% week-on-week, ending a five-week decline. In contrast, the New Territories East and Kowloon districts showed weak trends, with New Territories East reporting 120.19 points, down 0.4% week-on-week, marking three consecutive weeks of decline; Kowloon reported 123.06 points, down 0.41%, with the upward momentum softening. The data reflects that the rental performance in these two districts is slightly weaker, putting pressure on rents.

The 28Hse Research Department expects that the rental index will fluctuate between 114 and 120 points in the short term. With the government actively promoting the "Study in Hong Kong" brand and direct investment primary and secondary schools admitting more non-local students, overall rental demand is expected to further increase. Coupled with the substantial housing needs of local families, the rental market's fundamental base remains solid.

Looking ahead, as the demand for rental housing from international students gradually emerges, it is expected that the rental index may challenge the historical high of 118.54 points in the next two months. In the long term, it is anticipated that the rental trend will continue to improve throughout 2026, with an annual increase ranging from 2% to 4%