China’s property market showed tentative signs of stabilization in January as price declines across 70 major mainland cities narrowed. But the clearest reversal has been in Hong Kong, where transaction volumes and prices have moved decisively higher after a multi-year slump.
Hong Kong’s Land Registry recorded 80,702 property transactions in 2025, an 18.7% rise year-on-year, with total turnover of HK$614.3 billion, up 15%. The private residential price index rose roughly 3.25–3.3% for the year — the first annual increase since 2021 — and the widely watched Centaline City Leading Index (CCL) for second‑hand flats has climbed steadily since a trough in March 2025.
The rebound is broadening. As of the second week of February 2026, the CCL was still gaining momentum, up 1.47% week-on-week and 3.29% month-on-month. Transaction activity has followed prices: higher volumes have increased market confidence, and rising confidence has drawn more buyers back into the market, creating a self-reinforcing recovery.
Buyers point to a cluster of policy and economic drivers. The Hong Kong government’s decision to remove several anti-speculation measures — the so-called “cooling” taxes that had raised stamp duties for many buyers — lowered the tax burden on mainland and other non-local purchasers. At the same time, mortgage costs have eased as global rates have softened and Hong Kong’s currency peg to the dollar transmits US rate cuts into local lending.
Demand dynamics have also shifted. Mainland buyers appear to be re-emerging in force: property research based on registered buyer names estimates around 13,906 mainland-purchased transactions in 2025, up 14.1% from 2024, collectively worth about HK$137.9 billion, a 3.8% increase. That roughly equates to one in every four homes sold being bought by a mainland resident.
Structural drivers are amplifying near-term momentum. Hong Kong’s post-pandemic talent and student intake has accelerated housing demand around universities and business districts. The government’s talent admission schemes have generated hundreds of thousands of applications and tens of thousands of arrivals, while non-local student quotas at several public universities rose markedly from the 2024/25 academic year.
For many purchasers the math has become attractive. Some recent buyers report rental yields that cover mortgage payments, and anecdotal deals show quick flips that would have been unimaginable during the downturn. A purchaser who recently moved to Hong Kong for work paid HK$7 million for a 25 square metre flat near the University of Hong Kong; rents in comparable units can reach around HK$24,000 a month, roughly offsetting mortgage costs at current rates and reducing the effective monthly burden on buyers.
Not all of the story is exuberant. Prices in many Hong Kong districts remain well below their 2021 peaks — overall declines from that high are estimated at 25–30% — and pockets of oversupply and affordability pressures persist. Analysts warn that the recovery depends on continuing loose external financial conditions, steady demand from mainland buyers, and a limited rebound in new supply. A policy reversal, renewed global rate volatility, or a sharper slowdown in mainland growth could reverse part of the gains.
Still, the immediate significance is clear: Hong Kong has become the first major Chinese city to move from sustained downturn into a visible recovery, and that shift is already reshaping investor behaviour across the city. For mainland markets the picture is more mixed: price falls have narrowed, but most mainland cities have not yet joined Hong Kong in reporting outright annual increases.
For global investors and regional policymakers the lessons are twofold. First, small changes in tax and financing conditions can trigger outsized demand responses in tightly supplied, highly liquid markets such as Hong Kong. Second, cross-border flows — especially from mainland buyers and talent-driven migration — can reassert a powerful influence on asset prices, even amid a broader Chinese property correction.