According to JLL, the three developers will provide 60 percent of new homes in 2025 and 2026, an increase from 40 percent in 2023 and 2024.
According to JLL, three of Hong Kong’s largest real estate companies—Sun Hung Kai Properties (SHKP), CK Asset Holdings, and Henderson Land—are anticipated to lead the property market. This trend is due to an increasing preference among home buyers for smaller apartments because of current economic uncertainties.
According to the property consultancy, the group was expected to provide 60 percent of new residential units in 2025 and 2026, an increase from the 40 percent planned for 2023 and 2024.
Sales of class A units – measuring 431 sq ft or smaller – accounted for more than 60 per cent of all residential transactions in March, JLL said, up from nearly 50 per cent in 2024. A cut in the stamp duty, announced in February, helped drive those deals.
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“Faced with potential interest rate volatility and macroeconomic instability, prospective buyers are increasingly adopting defensive strategies: either postponing purchases altogether or opting for smaller, more affordable flats,” said Norry Lee, JLL’s senior director of projects strategy and consultancy in Hong Kong. “Small lump sum units [have become] a safer choice in uncertain times.”
In February, the Hong Kong government eased its housing regulations by reducing the stamp duty and setting a flat fee of HK$100 for properties valued at up to HK$4 million (US$516,100). This change enables additional purchasers to take advantage of these perks. Previously, the limit stood at HK$3 million.
SHKP, CK Asset, and Henderson will keep supplying most of the housing units since mainland Chinese developers and smaller companies have avoided participating in bids for residential land parcels in the city due to the ongoing decline in the real estate market.
For instance, in February, SHKP secured a parcel of land measuring 37,268 square meters (401,000 square feet) in Tung Chung; this was the final residential lot offered through public auction by the government. According to their latest annual reports, CK Asset held a total of 7 million square feet of land, which includes developments under collaboration with others, whereas Henderson possessed land reserves totaling 10.9 million square feet as of December 2024.
Property developers rapidly modified their approaches, according to JLL, with an increase in the completion of Class A apartments because they ensured sales in the present market conditions.
weak market conditions
“.
Last year, the completion of class A apartments surged to 10,794 units, accounting for roughly 45% of all new homes, according to JLL data. In comparison, this figure stood at just 2,160 units or 14% back in 2014. The forecast predicts an uptick to 11,065 units or 53% in 2025, followed by further growth to 11,553 units or 58% in 2026.
This trend can be observed with SHKP’s 9,700 units.
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In the New Territories, over 700 units were snapped up during the initial three phases. These apartments ranged from 301 sq ft to 702 sq ft and were listed at prices up to 20 percent lower compared to similar properties in the vicinity, as reported by real estate professionals.
End-users still show significant interest in smaller apartments as evidenced by the positive feedback on newly launched projects,” Lee stated. “As a result, developers are expected to keep focusing on constructing compact units to cater to this ongoing demand.
In spite of strong demand for smaller units, concentrating on this sector posed considerable difficulties, as reported by JLL. An indicator monitoring high-grade residential properties showed
prices
dropped 9.2 percent in 2024, more significant than the 5.6 percent decline in the overall market.
JLL stated that the future direction of the market depends on the complex interaction between supply-side management—like developers’ decisions aimed at maintaining price stability and reducing inventory—and demand-side buying capacity, which is influenced by how much the trade dispute affects Hong Kong’s actual economic performance.
The present pipeline might exceed absorption capacity, especially if economic challenges like extended trade conflicts diminish buyer confidence or reduce rental yields, the real estate advisory firm noted additionally.
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The article initially appeared on the South China Morning Post (www.scmp.com), which serves as the premier source for news coverage of China and Asia.
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