Hong Kong’s property market faced challenges, and asset prices were constrained amid cautious sentiments in 2024 due to the uncertain external economic outlook, heightened geopolitical tensions and tight financial liquidity, according to the Rating and Valuation Department.

The overall sales market performed poorly in 2024 with prices falling across all property segments, the department said in its Hong Kong Property Review 2025.

Trading volume shrank for the non-residential market, but the number of domestic sales transactions rose due to the competitive pricing strategies adopted by developers to boost primary sales, it said.

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“While the domestic rental market was upbeat during the year buoyed by the influx of talents, demand for housing for students as well as a shifting trend from home purchase to leasing, rents of all segments of non-residential properties registered year-on-year declines by end of 2024,” reads the report.

To promote a healthy and steady development of the property market, the special administrative region government said it will continue with the work on planning and land creation, and roll out developable sites in a paced and orderly manner.

The cancellation of all demand-side management measures on residential properties injected impetus to the domestic market. The relaxation of standardized loan-to-value and debt-servicing ratio limits to 70 percent and 50 percent, respectively, for residential and non-residential properties and the announcement in February 2025 to raise the property value threshold to qualify for a nominal stamp duty of HK$100 from HK$3 million to HK$4 million have further eased the financial burden on property buyers and energized the market, according to the department.

“In the end, domestic prices fell for the past three consecutive years, with a 7.2 percent year-on-year decrease by December 2024.”

Trading volume in the primary and secondary sales markets, on the other hand, surged to a total of 53,099 transactions in 2024, an increase of 23 percent from the preceding year.

The rental market outperformed the sales market, the report shows.

Buoyed by the influx of talent arising from various talent admission schemes implemented by the government, demand for housing for students, and a shifting trend from home purchase to leasing, domestic rents recorded a year-on-year growth of 3.3 percent by December 2024.

The year-end market yields for all classes of domestic properties rose to the range from 2.3 percent to 3.5 percent.

Meanwhile, completions of private domestic units in 2024 soared to 24,261 units, made up mostly of small and medium units and 75 percent more than those in 2023, according to the report.

Take-up, at 17,305 units, was 10 percent higher than that of 2023, while vacancy at the year-end was 4.5 percent of the total stock, equivalent to 57,900 units.

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The department forecasted completions of 20,862 units in 2025 and 20,098 in 2026.

“As our country is pursuing the development of new quality productivity and strengthening technological innovation to sustain economic growth, coupled with the government’s proactive efforts in expanding economic capacity, enhancing competitiveness and developing strategic growth areas, Hong Kong’s property market is expected to benefit from these positive developments and remain resilient despite the headwinds from the complicated and unstable external environment,” reads the report.