Hong Kong Property "Post Decree 837 Property tour takeaway: Slowing home..."

Research evidence excerpt

Hong Kong Property "Post Decree 837 Property tour takeaway: Slowing home..."

gns of slowdown in both primary and secondary markets

We track several high-frequency indicators to assess whether the housing market is

weakening. In the primary market, i) sell-through rates for new project debut have

softened to 45–74%, versus close to 100% in April–May; and ii) weekend new home

sales slowed to only 40 units, down 72% versus the June 2025 average. In the

secondary market, i) weekly transactions at the top 35 estates dropped to 43 cases, the

lowest level since February 2025 excluding CNY 2026; ii) weekend viewing

appointments at the top 10 housing estates declined 10% YoY, versus growth of 16–

30% in April–May; and iii) secondary listings have gradually rebounded.

Key catalysts to monitor: fixed-rate mortgage continuity & future sell-through

We reiterate our 2026E HK home price forecast of +5–10%, vs YTD +10.6%, implying

that the current recovery momentum may pause in 2H26. This view has remained

unchanged since the beginning of the year, when we first observed signs of a slowdown

following the outbreak of the Middle East conflict. Residential rental yields have already

compressed to around 3.3%, broadly in line with the current P-cap mortgage rate of

3.25%. Therefore, any potential withdrawal of the 2.73% fixed-rate mortgage plan by

local banks, possibly due to US rate hikes, would immediately remove the remaining

mild positive carry. Meanwhile, we believe upcoming sell-through rates in June–August

will be important in confirming whether the market has reached an inflection point. Key

launches include: 1) SHKP’s Yuen Long Garden Regency (566 units); 2) Wheelock’s Kwu

Tung PARK SILICON (781 units); 3) Kowloon Development’s Ngau Chi Wan project (2k