The property market this week continued to exhibit a pattern of weak home prices and strong rentals. The Eva Property Index (EPI) stood at 119.93 points this week, representing a week-on-week decline of 0.72%. The index has retreated for two consecutive weeks, falling below the 120-point threshold; compared to the historical peak of 145.76 points recorded in August 2021, the cumulative decline has widened to approximately 17.72%. Regional performance registered three declines and one increase. Sales of unsold primary inventory in Kowloon, Hong Kong Island, and New Territories East remained sluggish, with only new projects in New Territories West bucking the broader market downturn to record robust sales.
Frontline agents noted that prospective buyers are currently evaluating the impact of recent Mainland policies on the local property market, thereby adopting a wait-and-see approach. Furthermore, as the traditional summer peak season draws to a close, secondary market homeowners have generally softened their stance and widened their room for negotiation. In Ma On Shan, for instance, the district has consecutively recorded instances of price reductions to expedite sales, as well as loss-making transactions despite years of holding. This reflects homeowners' cautious outlook on the market's future trajectory, which has further dragged down property prices in New Territories East and the broader market.
Conversely, the rental market sustained its upward momentum. The Eva Rental Index (ERI) closed at 121.42 points, edging up by 0.24% week-on-week. This marks the fourth consecutive week of growth, with the index stabilizing above the 121-point level for two consecutive weeks. Boosted by the traditional summer leasing peak season, multiple housing estates across Kowloon, New Territories West, and New Territories East recorded leasing transactions at above-market rates, driving a steady increase in overall rents.
Looking ahead, market focus in the second half of the year will center on the impact of the Mainland's tightened capital outflow policies and the interest rate trajectory of the US Federal Reserve. Overall, property prices are expected to remain under pressure in the near term. In contrast, underpinned by persistently robust leasing demand, rents are poised to maintain a steady upward trajectory.
Regional Property Price Indices Record Three Drops and One Rise; Kowloon Plunges Over 3% in Three-Week Losing Streak
Regional property price indices remained broadly under pressure this week, with the overall trend recording three drops and one rise. Kowloon registered the most significant decline, with its latest index reporting at 113.12 points, down 3.17% week-on-week and marking a three-week losing streak. Hong Kong Island reported 109.36 points, dropping 0.61% week-on-week in a two-week decline. New Territories East stood at 121.07 points, edging down 0.14% week-on-week, also recording a two-week losing streak. Conversely, New Territories West bucked the market trend to perform well, with its latest index at 123.3 points, up 0.3% week-on-week and successfully ending a two-week decline.
Property prices in Kowloon were significantly pressured, primarily due to the slow sales of primary market inventory and a lack of large-scale, new focal projects to stimulate the market. Primary transactions this week were solely supported by sporadic sales at Grand Homm, MIAMI QUAY I, Pano Harbour, and Baker Circle Dover. This had a marginal impact given the district's massive unsold inventory of approximately 9,000 units. Furthermore, the new Cheung Sha Wan project, The Sterling I, launched its first batch of 102 units at market prices, with an average discounted price of $17,880 per square foot. The entry price hit a low of $16,538 per square foot, setting a 13-year low for South West Kowloon since the launch of THE AUSTIN in 2013. This pricing represents a substantial discount of about 30% compared to the Grand Victoria series in the same district, directly impacting the local secondary market. Prospective buyers have generally adopted a wait-and-see approach, while secondary market owners have widened their negotiation margins, dragging down overall property prices.
In terms of viewing volume, data from Midland Realty indicates that weekend viewing appointments for the seven major indicator estates in Kowloon dropped by approximately 5.03% week-on-week to about 170 groups, reflecting sluggish market sentiment. Terence Ho, Account Director of United Properties Limited, noted that some buyers are currently evaluating the impact of recent Mainland policies on the Hong Kong property market, leading to quieter trading activity. However, the Clear Water Bay Road project in Ngau Chi Wan, 33 Clear Water Bay, has uploaded its sales brochure and announced plans to launch this month, which may inject renewed focus into the district's property market.
On Hong Kong Island, the sales of unsold units across multiple new projects showed no signs of improvement. Primary market transactions were mainly concentrated in The Headland Residences, which recorded 13 sales. Lacking the momentum of brand-new projects in the district, buyers largely remained on the sidelines observing market conditions. The pace of secondary market transactions slowed down, keeping local property prices under continuous short-term pressure.
Property prices in New Territories East remained soft, with the primary market solely supported by the Seaview Crescent series. The new Kwu Tung North project, PARK SILICON Phase 2 PALO SPRINGS, was recently launched with an average discounted price approaching $18,000 per square foot. The market has widely drawn comparisons between this development and the similarly priced urban new project, The Sterling I. Given the mature transportation networks and comprehensive living amenities in Cheung Sha Wan, the pricing of PALO SPRINGS is perceived as overly aggressive by contrast. In light of the questionable market absorption capacity, secondary market homeowners in New Territories East have proactively lowered their asking prices.
Johnson Chong, District Manager of Century 21 Goodwin Property Consultants, pointed out that entering the tail end of the traditional summer peak season, the stance of some property owners in the Ma On Shan district has softened. Transaction volumes decreased compared to the previous month, with some owners more willing to reduce prices to facilitate sales. For instance, a three-bedroom unit in Flat C, Mid-floor, Block 3A of Seanorama, with a saleable area of 780 square feet, was originally listed at $9.5 million. It was eventually sold for $9.2 million after a $300,000 price cut. The original owner purchased the unit first-hand for $10.99 million in 2017, suffering a book loss of $1.79 million after holding the property for nine years. Such loss-making transactions reflect local owners' bearish outlook on the future market, further dragging down property prices in New Territories East.
New Territories West emerged as the only region to record an increase this week, primarily benefiting from the satisfactory sales of unsold units in specific new projects. Although the focal project, Garden Regency, did not have a large-scale launch this week, it still recorded 23 transactions of remaining stock. The developer even raised prices for 53 of these units by 2% to 4% and scheduled a new round of sales for mid-month. The positive sentiment in the primary market bolstered the holding confidence of secondary market owners in the district, narrowing negotiation margins and driving New Territories West property prices up against the broader market trend.
On the macroeconomic front, the Mainland's recent tightening of capital outflows, coupled with the requirement for tax residents to pay individual income tax on offshore income, has exerted a substantial impact on the Hong Kong property market. Transactions relying on Mainland capital or bulk buyers have noticeably slowed, adding a heavy wait-and-see atmosphere to the broader market.
Alex Cheung, 28Hse Limited Data Researcher, expects the EPI to fluctuate between 112 and 124 points in the short term. Looking ahead to the second half of the year, the market anticipates that the US Federal Reserve may raise interest rates, which is expected to increase borrowing costs. Potential interest rate risks add undercurrents to secondary market property prices. Combined with restricted Mainland capital outflows, overall property prices are expected to face downward pressure and maintain a soft trajectory in the second half of the year.
Leasing Market Remains Active with Kowloon Rents Rising 0.7% for Two Consecutive Weeks
The Hong Kong residential leasing market has maintained its strong momentum recently. Driven by the traditional peak leasing season and the back-to-school effect, market demand continues to grow. With an increasing number of leasing transactions from mainland students and incoming professionals, the absorption rate of rental listings across various districts has accelerated, pushing overall rent levels upward. The ERI currently stands at 121.42, representing a week-on-week (WoW) increase of 0.24%. The index has risen for four consecutive weeks and has sustained the 121-point level for two weeks. The index surpassed its previous historical peak of 118.54 points recorded in 2019 by approximately 2.43% to reach a new record high, indicating robust market absorption capacity.
An analysis of the four major regions reveals a trend of three gains and one drop. Kowloon outperformed the others, reporting at 125.98, up 0.7% WoW, marking a two-week consecutive rise. New Territories West (NTW) followed closely at 138.54, up 0.47% WoW, also rising for two consecutive weeks. New Territories East (NTE) reported at 124.12, edging up 0.14% WoW and successfully halting its decline. Conversely, Hong Kong Island reported at 134.01, down 0.39% WoW, ending a four-week rising streak and making it the only region to record a decline this week.
The rental growth in Kowloon was primarily driven by high-per-square-foot leasing transactions within the district. For instance, a high-floor studio unit (Flat G) in Block 1B, Double Coast III, with a saleable area of 250 square feet, was leased to a tenant from another district for $13,500. The unit rent reached approximately $54 per square foot, nearly 15% higher than the 90-day average of $47 on the 28Hse platform. Additionally, a mid-floor two-bedroom unit (Flat A) in Block 6, The Hermitage, with a saleable area of 531 square feet, was leased to a mainland family for $31,500 just three days after listing. The unit rent peaked at $59.3 per square foot, nearly 10% above the average level. The frequent occurrence of such premium transactions this week has served as the primary catalyst for Kowloon's rental surge.
Similar trends were observed in NTW. A low-floor three-bedroom unit (Flat A) in Block 5, Phase 2, Discovery Park, with a saleable area of 659 square feet, was leased to a corporate client for $26,000. The unit rent of $39.5 per square foot exceeded the estate's concurrent average. In Central Park Towers, a high-floor two-bedroom unit (Flat C) in Block 6, with a saleable area of 493 square feet, was leased to a local district tenant for $14,600 per month with a half-year rent prepayment. The unit rent stood at $29.6 per square foot, outperforming the platform's 90-day average of $27. These cases indicate that large-scale estates in NTW maintain solid leasing demand, with transaction unit rents of certain flats surpassing recent averages, thereby supporting the district's rental trajectory.
In NTE, premium leasing transactions were also recorded in specific estates. A low-floor two-bedroom unit (Flat G) in Block 10, The Regent in Tai Po, with a saleable area of 524 square feet, was leased to an out-of-district family for $23,000 this week. The unit rent of $43.9 per square foot was notably higher than the recent average of approximately $41, driving up rental values in the area.
Alongside the favorable rental yields in Tai Po, leasing activity along railway lines, such as in Ma On Shan, remained robust, further consolidating the rental uptrend in NTE. Chong noted that, driven by the summer peak season for incoming professionals, the average unit rent in the Ma On Shan district edged up by approximately 2% to 3% month-on-month. Currently, rental listings priced near market value are absorbed rapidly, typically securing tenants within 7 to 10 days, while some premium small-sized units can be leased in just 3 days. This buoyant leasing activity naturally underpins rental prices.
In contrast, the rental trajectory on Hong Kong Island was pressured, dragged down by below-market transactions in specific buildings. Three one-bedroom units (Flats A, C, and D) on the same mid-level floor in Spring Garden, Wan Chai, with a combined saleable area of 852 square feet, were leased for a total monthly rent of $62,000. The average unit rent of approximately $73 per square foot fell below the market average of $78, thereby weighing on the overall rental performance in the district.
In summary, supported by local demand and the influx of overseas and mainland talent, overall rents in the Hong Kong residential leasing market continue to rise. As the traditional peak leasing season has not yet concluded, transaction volumes are expected to remain elevated in the short term, with rents staying at high levels. Cheung projects that the ERI will fluctuate between 114 and 124 points in the near term, with a full-year rental growth of approximately 2% to 4%, and further upside potential for the index moving forward.
The above indices reflect market conditions from August 7, 2026, to August 13, 2026.
