Hong Kong's residential sector enters 2026 with clearer evidence of stabilization after a mixed 2025, as momentum strengthened in the second half of the year. This trajectory aligns with Colliers’ assessment that the broader real estate market is moving into a phase of measured recovery across major property sectors.
Sentiment has improved as financial conditions ease, creating a more active environment among local and cross-border purchasers. Indicators continue to point to a gradual upturn.
Mainland participation was a defining feature of the luxury market through 2025. Purchasers from across the border acquired about HK$16 billion worth of super-luxury homes in the city’s most exclusive districts, accounting for most high-value transactions in The Peak and Southern District. This momentum has extended into 2026.
On 2 January, a Mainland buyer acquired six units in a newly completed Southern District project for about HK$860 million, signalling continued appetite at the top of the market. The trend reflects, in part, a wave of Chinese capital repatriation from regional and global markets.
Furthermore, the sheer volume of capital raised in Hong Kong’s resurgent IPO market, which reclaimed its position as the world’s top fundraising venue in 2025, has created a substantial pool of liquidity. A portion of this capital is going into real estate assets, directly and through listed vehicles. This channel of capital allocation will likely provide sustained support for market activity into 2026.
Hong Kong’s super luxury assets are widely regarded as a haven due to scarcity, value retention and the clearer ownership structures typically found in newbuild stock. Cross-border participation in 2025 extended beyond the super-luxury bracket, with mass market purchases forming a substantial part of overall activity.
Centaline’s latest transaction data shows these investors accounted for around 25% of all private home purchases, with strong participation in units between 431 and 752 square feet. Midland’s reporting platform similarly highlights broad involvement across multiple price points, with firm interest in newer mainstream projects alongside high-value transactions in The Peak and Southern District.
Activity patterns in 2025 show how closely residential demand follows cross-boundary transport links. The New Territories outperformed last year, with transaction volume expanding by more than 50% year on year. The region forms the spine of the cross-boundary railway system, incorporating Fanling, Sheung Shui, Lok Ma Chau and the wider Northern Metropolis corridor.
Along the East Rail Line, buyers concentrated on areas with direct Shenzhen links. Centaline’s dataset identifies Sheung Shui, Fanling and Tai Po as core districts where unit sizes aligned closely with investor preferences. Similarly, areas near the Tuen Ma Line, which offers direct interchange to the high-speed rail terminus at West Kowloon, have recorded sustained interest. This pattern underscores how the northern (East Rail Line) and western (Tuen Ma Line) transport spines are channelling cross-border demand into specific districts.
Kowloon districts with access to the West Kowloon high-speed rail terminus also recorded sustained engagement. Buyers identified through Mandarin pinyin registration represented 31.6% of primary market transactions in November 2025, although some may have been Hong Kong residents.
Kam Sheung Road has become a notable activity point within the Northern Metropolis corridor. The station on the West Rail Line offers direct interchange to Austin and the West Kowloon high-speed rail terminus, making it attractive for cross-border purchasers. Development data indicates that approximately 1,650 new units were clustered around the station, reflecting significant planned supply.
Agency listings show strong availability of small to mid-sized units in neighbouring estates such as Grand Mayfair, with typical sizes falling within the ranges preferred by many Mainland buyers. The growing activity around Kam Sheung Road therefore fits neatly within the broader citywide pattern of demand for compact and efficiently sized homes.
Kai Tak has emerged as the city’s prominent hotspot for Mainland investors, driven by substantial newbuild supply and sustained marketing activity. However, despite strong activity in Kai Tak, the New Territories continues to account for 53% of primary transactions, underscoring the structural pull of northern transport corridors and the connectivity logic driving purchaser behaviour.
Residential capital flows serve as early signals for pricing and development expectations across mixed-use and neighbourhood commercial assets in rail-linked districts. The clustering of Mainland demand around key transport corridors also intersects with decentralization considerations for offices and supports long-term strategic thinking for logistics and industrial uses within the Northern Metropolis. Rail adjacency continues to be a primary driver of value creation, with implications across development, investment, retail and professional services.
Alvin Leung, Senior Director, Valuation & Advisory Services, Colliers