A notable decline has been observed in Hong Kong's property market during the first quarter of 2025. Official data reveals a weakening trend across residential, office, and retail sectors. In particular, the average price index for private domestic units experienced a significant drop to 284.2, compared to 298.7 in 2024. Despite this downward movement, rental prices have shown relative stability, with only a slight decrease in March 2025. Even traditionally sought-after housing developments are witnessing reduced buyer confidence, as reflected by their price indices dipping below 245.

Early indicators suggest potential stabilization within the residential segment. According to Eddie Kwok from CBRE Hong Kong, after four consecutive months of declines, residential prices began to stabilize in April 2025, registering a modest increase of 0.4% month-over-month. This uptick may indicate the market is reaching its lowest point. Additionally, decreasing financing costs could play a pivotal role in recovery efforts. As one-month HIBOR rates fell in May, it became more cost-effective to repay mortgages than to rent, potentially encouraging renewed interest in purchasing homes. However, expectations for a robust rebound remain tempered due to ongoing inventory challenges facing developers.

While signs of stabilization exist, other segments continue to face difficulties. Grade A office rents in key areas like Central and Wan Chai have also decreased, influenced by excess supply and diminishing corporate leasing activity. Retail property markets remain unpredictable, with varying trends observed between Hong Kong Island and Kowloon/New Territories regions. Although some stabilization occurred on Hong Kong Island, fluctuations persist elsewhere. Looking ahead, continued development projects in both residential and commercial sectors may further impact transaction volumes. Despite these challenges, there is hope that easing financial conditions will foster gradual improvements in Hong Kong's property landscape.