Hong Kong’s property market continued to show mixed performance in early 2026, with the office sector facing ongoing challenges while residential demand remained relatively resilient. Although leasing activity in some office districts softened, healthy housing transactions and stable home prices suggest buyer confidence remains intact in key residential segments.

Office Market Faces Ongoing Pressure

The office market recorded negative net absorption during the quarter, reflecting cautious corporate expansion and continued vacancy challenges in certain districts. While leasing activity remained active in selected prime locations, performance varied across submarkets. Central continued to demonstrate resilience, supported by rental growth and improving occupancy, while some fringe office districts remained under pressure.

Despite these challenges, major corporate commitments continued to support the market. Large leasing transactions and investment activity indicate that occupiers remain focused on quality buildings in strategic locations.

Residential Demand Holds Firm

The residential market delivered a stronger performance, supported by healthy transaction activity and stable pricing. First-quarter residential transactions reached their strongest level in several years, reflecting improving buyer sentiment and continued interest in well-located projects.

Home prices remained largely stable, while new launches continued attracting attention from both owner-occupiers and investors. Demand for premium and luxury properties also remained active, highlighting confidence in Hong Kong’s long-term residential market fundamentals.

Selective Market Favouring Quality Assets

One of the key themes emerging in 2026 is growing selectivity among buyers and investors. Demand is increasingly concentrated in well-located residential projects, prime office assets, and quality developments with strong long-term fundamentals. Rather than broad-based market growth, performance is becoming more dependent on asset quality and location.

This trend is creating opportunities for investors who focus on resilient sectors while remaining cautious toward weaker-performing segments.

Outlook

Hong Kong’s property market is expected to remain selective through the second half of 2026. While the office sector may continue facing pressure from elevated vacancies, residential demand is likely to remain supported by stable pricing, healthy transaction volumes, and continued interest in quality developments. Markets with strong fundamentals and strategic locations are expected to outperform as investors prioritise resilience and long-term value.