According to a recent report, luxury residential prices in Hong Kong rose by approximately 2% in the second quarter of 2026, bringing the year-to-date increase to 3.9%. The market has now experienced 12 consecutive months of growth, with prices rebounding roughly 10% from the low recorded in March 2025.
However, the total transaction value for luxury properties declined by 30% from HKD 12.56 billion to HKD 8.76 billion, while the number of deals also fell from 70 to 48.
An executive director from the valuation and advisory services division of CBRE in Hong Kong commented that, although new regulatory measures for outbound investment from mainland China might temporarily affect the purchasing intentions of some buyers, demand from high-net-worth individuals remains robust.
He further noted that this sustained demand, combined with the limited supply of luxury homes in prime locations and the gradual improvement in financial market conditions, supports the expectation that Hong Kong's luxury residential property prices will record an increase of about 5% to 10% for the full year 2026.
Regarding the Grade-A office market, the report highlighted a further strengthening in leasing activity during the second quarter, which increased by 23% quarter-on-quarter to 1.1 million square feet. The cumulative leased area for the first half of 2026 reached 2.1 million square feet, equivalent to 48% of the total volume for the entire year of 2025.
Net absorption in the second quarter was 569,600 square feet, bringing the first-half total to 945,000 square feet. This marks a significant improvement compared to the negative absorption of 88,000 square feet recorded in the first half of 2025.
Concurrently, the vacancy rate declined for a second consecutive quarter. A lack of new supply, coupled with positive net absorption, drove the overall office vacancy rate down by 0.6 percentage points to 16.2%.
Rents for Grade-A office space resumed their upward trajectory, with overall office rents increasing by 2% quarter-on-quarter in Q2. Year-to-date growth stands at 3.5%, reversing the downward trend seen in the second half of 2025. CBRE anticipates full-year Grade-A office rental growth of 4% to 6%.
In the retail sector, the report indicated that leasing activity in core retail districts accelerated further in the second quarter. Leased area surged by 55% quarter-on-quarter to 337,100 square feet, pushing the cumulative leasing volume for the first half of 2026 to 48% of the 2025 annual total.
The vacancy rate for retail spaces fell by 0.3 percentage points quarter-on-quarter to 6.5%, representing the second-lowest level since the fourth quarter of 2019. This low vacancy rate supported a 1% quarter-on-quarter increase in rents, marking the 16th consecutive quarter of growth. Year-to-date, retail rents have climbed 18%.
CBRE forecasts that rents for shops in core districts will rise by 3% to 5% for the full year, while rents for major shopping malls are expected to increase between 0% and 5%.
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