According to a report, JPMorgan states that the Hong Kong secondary property price index has rebounded by 10.4% year-to-date, rising 17.9% from its trough, exceeding expectations and already reaching the bank's previous full-year 2026 forecast of 10-15%. While the bank maintains this forecast, it also implies that property price growth in the second half of 2026 may slow to below 5%. Although the two major headwinds—capital outflow controls and interest rate hike concerns—have been extensively discussed, the bank believes the greatest downside risk is actually the persistent weakness of the Hong Kong stock market. Fortunately, fundamentals in other areas, such as inventory of units for sale, rental growth, and demographics, remain robust. Therefore, the bank currently anticipates a deceleration in price growth, but expects the upward cycle to continue. However, if the Hang Seng Index remains weak over an extended period, property prices could face downward pressure.
In the near term, the bank prefers CK Asset Holdings Ltd (HKG: 1113) and SINO LAND (HKG: 0083). The price target for SINO LAND has been lowered by 13.8%, from HK$14.5 to HK$12.5, with an "Overweight" rating. Henderson Land Development Company Limited (HKG: 0012) is expected to potentially underperform the market; its target price has been cut by 10%, from HK$30 to HK$27, with a "Neutral" rating. Simultaneously, the target price for Sun Hung Kai Properties Ltd (HKG: 0016) has been reduced by 13.6%, from HK$162 to HK$140, with an "Overweight" rating.
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