A transformation is occurring in Hong Kong's residential landscape, marked by a growing emphasis on smaller apartments and an increased market presence from major local developers. According to the latest analysis by JLL, there has been a notable increase in the supply of Class A units, defined as flats measuring 431 square feet or less. These compact homes have captured nearly half of all new completions in 2024, signaling a shift toward affordability amid economic uncertainty.

The rise in small-unit construction reflects changing consumer preferences influenced by ongoing financial instability that began with the property market's decline in 2021. As buyers become more cautious, they are gravitating toward more budget-friendly options, often delaying larger purchases. Additionally, favorable tax incentives for homes priced below $4 million have bolstered demand for these smaller residences. Meanwhile, mainland and smaller local developers have slowed their land acquisitions, creating an opportunity for prominent Hong Kong firms such as Sun Hung Kai Properties, CK Asset, and Henderson Land to strengthen their dominance in the housing sector.

Looking ahead, this trend is expected to continue, with projections indicating that Class A units will account for over half of all new completions in the coming years. The increasing influence of large developers promises a more strategic approach to project launches, potentially reducing competition while enhancing market stability. This evolution highlights the adaptability of Hong Kong's housing industry, aligning supply with evolving buyer needs and fostering sustainable growth amidst challenging economic conditions.