Extended Decline Ahead for Hong Kong's Property Market

According to JLL’s latest mid-year market forecast, Hong Kong’s property market is bracing for a continued decline through 2025, with full recovery not anticipated until 2026.

While there has been a slight uptick in Grade A office leasing, with a net absorption of 130,700 square feet in the first half of the year, JLL predicts that overall office rents will drop by approximately 5% in 2025.

Central's Stability vs. East's Setbacks

Rents in Central are expected to stabilize by the year's end, buoyed by an increased demand for high-quality office spaces and a resurgence of IPO activity. In contrast, areas like Hong Kong East may experience more dramatic declines, with rents potentially plummeting by up to 10% due to surging vacancy rates and an influx of new supply.

Retail Sector Faces Harsh Realities

The retail market isn’t faring any better. JLL forecasts a dip in retail rents by 5-10% for both High Street Shops and Prime Shopping Centres this year. With 600,000 square feet of new retail space set to hit the market in the second half, vacancy rates are expected to soar.

Commercial Investments in Decline

In the commercial property sector, large-scale transactions (over $50 million) plummeted by 25.7% year-on-year, totaling just $14.6 billion in the first half of 2025. JLL anticipates a continuing decline in capital values for Grade A offices, High Street shops, and warehouses by 5-10% as the year progresses.

Residential Market Pressure and Luxury Rents

The residential sector is feeling the strain from oversupply, with approximately 93,000 private units in the pipeline and a staggering 56.7 months required to clear existing inventory. JLL predicts that mass home prices could fall by 5%, while luxury homes may see a drop of 5-10%. Surprisingly, luxury rents are expected to increase by up to 5%, bolstered by the influx of professionals and students.

A Glimmer of Hope Amid Chaos?

Joseph Tsang, Chairman of JLL Hong Kong, suggests that low interest rates and discounts from developers could help stabilize market sentiment. However, he cautions that a significant recovery is not on the horizon until next year.