Modern Australian
The Times

New Home Sales and Returning Investors Help Drive Hong Kong Residential Market Transactions

Overall Office Leasing Activity Picks Up, but Grade A Office and Prime Retail High-Street Rents Remain Under Pressure

  • Homebuyers and investors were both active in the Hong Kong residential market in Q2 2025, incentivized by a weakening HIBOR and rapid launches of new projects by developers at attractive prices.
    The total residential transaction number for the Q2 period is expected to rise by 30% q-o-q to reach 15,900 units.
  • The Grade A office new-lease transaction area reached 1.2 million sf, the highest level since the COVID-19 pandemic period. However, the overall Grade A office rental level continued to decline, falling 1% q-o-q, resulting in an overall 3.4% drop for the 1H 2025 period.
  • Retail market sale performance has yet to demonstrate significant improvement despite an increase in visitor arrivals. High street vacancy rates generally trended upwards across core districts in Q2, weighing on overall rental levels. Nevertheless, a notable number of new leasing transactions were recorded, reflecting an ongoing "tenant reshuffling" in the market.
HONG KONG SAR - Media OutReach Newswire - 3 July 2025 - Global real estate services firm Cushman & Wakefield today held its Hong Kong Property Markets 1H 2025 Review and 2H Outlook press conference. The one-month Hong Kong Interbank Offered Rate (HIBOR) has been gradually softening since May, resulting in lower mortgage rates. Coupled with developers actively launching new residential projects at competitive prices, momentum in the primary residential market remained strong in the period. Improved rental yields also encouraged investors to re-enter the housing market, supporting monthly transaction volumes that exceeded 5,000 cases in Q2.

In the Grade A office sector, net absorption remained positive in Q2, with Hong Kong Island showing greater resilience. However, high availability and an abundant future supply pipeline continued to weigh on rental performance. In the retail sector, despite a steady rise in visitor arrivals, retail sales have yet to show notable improvement. Vacancy pressures persisted, leading to a general downward trend of high street retail rents during Q2.

Grade A office leasing market: New lease area reached 1.2 million sf, the highest level since the COVID-19 period

The Hong Kong Grade A office market witnessed accelerated leasing momentum in Q2 2025, underpinned by relocation and expansion activities from the banking & finance and insurance sectors, The new leased transaction area for Q2 2025 reached 1.2 million sf, the highest quarterly level since Q3 2019. Several big-ticket deals were recorded, including Jane Street's pre-commitment of more than 207,000 sf at Site 3 at the Central Harbourfront project. The overall office availability rate remained largely stable at 19.3% in Q2, while quarterly positive net absorption slowed, dropping almost 50% to record 71,400 sf. With the new supply pipeline remaining abundant, the overall Grade A office rental level continued to trend down, dropping 1% q-o-q in Q2, contributing to an overall 3.4% drop for the 1H 2025 period.

Chart 1: Rents of Grade A offices in Hong Kong

John Siu, Managing Director, Hong Kong, Cushman & Wakefield, said, "In the 1H 2025 period, the Hong Kong Stock Exchange is expected to rank first globally in terms of funds raised through the Initial Public Offering (IPO) market — reclaiming the top spot for the first time since 2019. With more Chinese mainland stocks expected in the pipeline, this should help support office market sentiment and stimulate downstream leasing demand, particularly in the banking & finance and professional services sectors. Despite the improving market sentiment, an ample new supply pipeline and high availability may continue to weigh on rental performance in 2H 2025, and we forecast the overall office rental to decline by 7%–9% throughout 2025."

John Siu added, "According to Cushman & Wakefield's new What Occupiers Want 2025 report, the top three priorities shaping occupiers' leasing strategies are cost control, talent retention, and operational excellence. While occupiers remain cost-cautious, they increasingly recognize the importance of a healthy and engaging workplace in attracting and retaining talent. Against this backdrop, other than offering rental incentives, we encourage landlords to collaborate closely with occupiers to create unique and value-driven work environments, so as to stand out in today's highly competitive office market."

Retail leasing market: Retail sales continued to contract despite improving tourist arrivals, while high street rents remained under pressure

For the January to May 2025 period, Hong Kong recorded more than 20 million visitor arrivals, growing 12% y-o-y. We believe this growth is supported by the opening of the Kai Tak Sports Park and the recent hosting of a range of mega-events at the venue. However, the rise in visitor numbers has not yet translated into stronger retail sales. From January to May 2025, total retail sales in Hong Kong amounted to HK$ 155.1 billion, reflecting a y-o-y decline of 4.0%. Visitor spending has become more cautious, with a growing preference for cultural experiences and value-for-money retail offerings. As a result, traditionally popular high-end retail categories have been most affected. Sales in the Jewellery & Watches and Apparel & Accessories sectors declined by 8.8% and 5.7% y-o-y, respectively. The Medicines & Cosmetics and Food, Alcoholic Beverages & Tobacco sectors recorded modest growth, rising by 3.4% and 2.7% y-o-y, respectively.

Vacancy rates generally trended upwards across core retail districts in Q2 2025. The vacancy rate in Causeway Bay showed the most notable increase to climb to 13.2%, from 5.3% last quarter. Vacancy rates in Mongkok and Central rose slightly q-o-q, to 9.5% and 8.6%, respectively, while Tsimshatsui remained stable at 9.4%. Retail leasing activity was most active in Mongkok in the Q2 period, supported by the district's relatively attractive rental levels and stable tourist footfall.

High street retail rents generally fell in Q2, in response to lifted vacancy pressure. Rents in Causeway Bay fell by 3.6% q-o-q, followed by Tsimshatsui and Mongkok at 3.4% and 1.7% q-o-q, respectively. Rents in Central rose slightly at 0.2% q-o-q, supported by resilient local demand. In the F&B sector, rents across districts recorded a mild decline on a q-o-q basis, within a 1% range.

Chart 2: High street retail rents in prime districts in Hong Kong

John Siu commented, "The Hong Kong retail market is experiencing a reshuffling of tenants. Retailers and F&B operators that are promoting local culture, offering unique experiences, and offering high-quality services and products, will likely be favored by tourists and will be able to prosper in the market. In contrast, some traditional retailers will be forced out of the market due to their failure to adapt to the shifted consumption patterns. Nevertheless, leasing activity in core districts has remained active. The current attractive rental level is lowering entry costs for new market players, while benefitting more mass-market retailers aiming to enter high-street areas. Looking ahead, with the opening of the Kai Tak Stadium, we expect that the government will continue to promote mega-events and world-class concerts, in turn drawing more international visitors and tourism spending. We expect high street retail rents and F&B rents to remain largely stable in the 2H 2025 period, and to mildly correct in the range of -1% to -3% through 2025."

Residential market:
Lower HIBOR and active new launches drive transactions; home prices stabilize in Q2

Overall sentiment in Hong Kong's residential market continued to improve in Q2 2025. The decline in the HIBOR during the quarter, which remained at relatively low levels, helped reduce mortgage and entry costs, creating favorable conditions for homebuyers. At the same time, developers actively launched new projects with attractive pricing strategies, fueling strong activity in the primary market and sustaining high overall transaction volumes. According to Cushman & Wakefield estimates, the total number of residential sales and purchase agreements in Q2 is expected to reach approximately 15,900, representing a 30% q-o-q increase, reflecting the continued market purchasing power.

Chart 3: Number of residential sale & purchase agreements

Rosanna Tang, Executive Director, Head of Research, Hong Kong, Cushman & Wakefield, added, "The positive market response to new launches between March and May supported monthly transaction volumes exceeding 5,000 units, indicating resilient end-user demand and contributing to home price stabilization. Based on data from the Rating and Valuation Department, the overall residential price index edged up by 0.5% between April and May, narrowing the first five months' decline to 0.9%. On the leasing front, the growing number of expats and non-local students, coupled with the traditional leasing peak season in May and June, drove the private residential rental index up by 0.67% m-o-m in May, resulting in a 1.4% increase over the first five months of 2025. Looking ahead, while global uncertainties persist and the sustainability of low HIBOR remains uncertain, a potential interest rate cut by the U.S. later this year could further support lower HIBOR levels, providing a positive narrative for the housing market. We maintain our earlier forecast that overall transaction volume will be similar to last year, with full-year home price fluctuations expected to remain within a ±3% range."

Edgar Lai, Senior Director, Valuation and Consultancy Services, Hong Kong, Cushman & Wakefield, concluded, "According to our tracking of popular housing estates, all market segments showed some improvement in Q2. Notably, City One Shatin, representing the mass market, recorded a 2.3% q-o-q sale price increase. Taikoo Shing, representing the mid-market, saw a modest 0.4% q-o-q rise, while Bel-Air, representing the luxury segment, saw sale prices decline narrowly by 2.5% q-o-q. Recently, some banks have relaunched mortgage cash rebate programs, effectively lowering the entry threshold and stimulating buying interest among prospective purchasers. Over the past one to two months, we observed an approximately 5% increase in mortgage inquiries compared to April. Among the newly signed provisional sale and purchase agreements, 60%–70% of transaction prices were 3% to 5% higher than their online valuations. These changes were most concentrated in properties priced at around the HK$10 million mark, and particularly in the HK$3– 4 million range, indicating a recovery in demand for small- to mid-sized units."

Please click here to download photos.

Photo 1: (From left to right) Edgar Lai, Senior Director, Valuation and Consultancy Services, Hong Kong, Cushman & Wakefield; John Siu, Managing Director, Head of Project and Occupier Services, Hong Kong, Cushman & Wakefield and Rosanna Tang, Executive Director, Head of Research, Hong Kong, Cushman & Wakefield.


Hashtag: #Cushman&Wakefield

The issuer is solely responsible for the content of this announcement.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In Greater China, a network of 23 offices serves local markets across the region. In 2024, the firm reported revenue of $9.4 billion across its core services of Valuation, Consulting, Project & Development Services, Capital Markets, Project & Occupier Services, Industrial & Logistics, Retail, and others. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.hk or follow us on LinkedIn ().

Diesel Shortage to Impact Trades and Contractors

Strait of Hormuz blockage affecting all major parts of trades and construction Trades and construction across residential, commercial and industria...

Why Holiday Home Owners Turn to Rental Management Agents

The Allure — and the Reality — of Renting Out Your Property Owning a holiday home is a dream for many Australians. Whether it's a beachside sha...

Why Finding Reliable Doctors In Bundoora Is Important For Long-Term Health

Access to quality healthcare plays an important role in maintaining overall wellbeing and managing health concerns early. Trusted Doctors in Bundoor...

Understanding the Different Types of Car Services: Minor vs Major

When it comes to car maintenance, one of the most important things every vehicle owner should understand is the difference between a minor and a maj...

How Superannuation and TPD Insurance Work Together

Superannuation is an essential part of financial planning in Australia. It is designed to provide individuals with income during retirement, helping...

Tiny Towns funding granted for Mt Hotham and Mt Buller upgrades

Alpine Resorts Victoria (ARV) has welcomed funding support from the Victorian Government’s  Tiny Towns Fund, with both Mt Hotham and Mt Buller se...

Locksmith Services: Why Professional Security Solutions Matter More Than Ever

Security is a critical concern for homeowners, businesses, and vehicle owners alike. Whether it involves protecting a property, replacing damaged lo...

Why Tooth Fillings Are Important For Protecting Damaged Teeth

Cavities and minor tooth damage are common dental problems that can worsen if left untreated. Professional tooth fillings help restore damaged teeth, ...

The Connection Between Visibility and Driver Confidence

Operating a vehicle safely requires an immediate, uncompromised stream of visual information from the surrounding road environment. A driver's decis...

Important Things To Know Before Starting An SMSF Setup

Planning for retirement requires careful financial decisions, and many Australians are now looking for more direct control over how their superannua...

Why Retail Cleaning Plays a Key Role in Customer Experience and Business Success

Professional retail cleaning services are an essential part of maintaining a welcoming, safe, and professional environment for customers and staff...

Simple Ways to Make a Commercial Property More Appealing to Buyers

Selling or leasing a commercial property isn’t just about listing the square metres, taking a few photos and waiting for the right person to appea...

What Café Owners Should Know Before Upgrading Their Display Setup

A café display fridge does a lot more than keep cakes cold and sandwiches fresh. It quietly shapes the way customers browse, the way staff move beh...

Creating a Backyard That Feels Comfortable All Year Round

A great backyard doesn’t need to be huge, expensive or perfectly styled. Most of the time, the spaces people actually use are the ones that feel e...

How Homeowners Can Make Smarter Energy Decisions Before Upgrading

Energy upgrades used to feel like something you only looked into after a power bill gave you a nasty surprise. These days, though, more homeowners a...

Why Retail CX Breaks During Peak Sales Events and How to Prevent It

Retail customer experience has become one of the most important drivers of revenue growth, especially during high-intensity sales periods. However, ev...

15 South Indian Dishes Everyone Should Try

If your only experience of "Indian food" is butter chicken and garlic naan, South Indian cuisine is going to feel like discovering an entirely new c...

What Every Homeowner Should Know About Roof and Drainage Maintenance

A home's roof and drainage system work together every day to protect the property from water damage. While many homeowners focus on visible areas such...