Hong Kong's Housing Market Shows Signs of Recovery, with Morgan Stanley Predicting a 12% Increase in Home Prices for This Year
Claire Weston
Morgan Stanley predicts Hong Kong home prices will rise another 12% this year, as a financial-sector rebound, cross-border capital inflows, and surging luxury deals all point to a broad housing recovery.
Why does Morgan Stanley dare call a 12% rally?
The bank's core argument is favorable supply-demand dynamics, reinforced by a steady stream of capital and talent from the Middle East and mainland China.
This means → Morgan Stanley is not betting on short-term speculation; it is betting that structural buyers keep arriving.
In plain terms = as long as real money keeps entering the market, prices have a floor.
What does the financial-sector rebound have to do with housing?
In Q1 this year, Hong Kong held its position as the world's top IPO venue, with mainland capital continuing to pour in.
A Boston Consulting Group report on May 27 showed Hong Kong narrowly overtook Switzerland last year to become the world's largest cross-border wealth management hub, with mainland funds accounting for roughly 60% of assets under management.
This means → more people in finance are earning more, and that purchasing power spills directly into the residential market.
How hot is the luxury segment?
Midland Realty expects new luxury home sales above HK$100 million (about US$12.8 million) to surpass the 2018 record of 109 deals this year.
This is happening even though the Hong Kong government raised stamp duty on such transactions in February — record volume despite a tax hike signals buyers are not price-sensitive.
This reflects a level of liquidity at the top end that far outstrips policy tightening.
How are other Asia-Pacific markets faring?
Nicholas Spiro, partner at Lauressa Advisory, notes the global energy shock has heightened risks in parts of the region: Thailand's tourism and hospitality sector is under pressure, and Australia's high interest rates are squeezing rental and investment activity.
Yet the same shock has also drawn attention to the region's strongest assets — prime offices, luxury homes, and recovery signals emerging in fragile markets.
In plain terms = the less stable the neighborhood, the faster capital flows to high-certainty markets like Hong Kong.
Content is for reference only, not financial advice.