Podcast Summary: Thoughts on the Market – "A Rebound for Hong Kong’s Property Market"

Date: January 27, 2026
Host/Speaker: Praveen Chaudhary, Morgan Stanley Head of Asian Gaming and Lodging and Hong Kong, India Real Estate Research

Episode Overview

In this episode, Praveen Chaudhary discusses the surprising rebound of Hong Kong’s property market. He examines why this pivotal Asian city’s real estate sector matters for global investors and unpacks the rare, synchronized upturn across all major property segments—residential, office, and retail—for the first time since 2018. The discussion explores the key drivers of this recovery, what sets this rebound apart from consensus expectations, and why international attention should remain fixed on Hong Kong real estate in 2026 and beyond.

Key Discussion Points & Insights

1. Hong Kong's Real Estate Market: Global Importance

• Why Watch Hong Kong:
  • Hong Kong is "one of the world's most globally sensitive real estate markets."
  • Market cycles in Hong Kong often "reflect and sometimes predict broader shift in liquidity, capital flows and macro sentiments across Asia."
  • (00:20) "When cycle turns here, it often reflects and sometimes predicts broader shift in liquidity, capital flows and macro sentiments across Asia." – Praveen Chaudhary

2. A Rare, Synchronized Upturn

• All Sectors in Growth:
  • For the first time since 2018, residential prices, office rents (especially in Central Hong Kong), and retail sales are all set to grow together.
  • This level of synchronized growth "hasn't happened in almost a decade." (00:39)

3. Residential Market as the Engine

• Price Decline and Recovery:
  • Home prices had dropped 30% since 2018 but have now bottomed out.
  • Morgan Stanley forecasts over 10% growth in 2026 after already rising 5% in 2025, with continued growth into 2027.
  • (01:02) "We actually expect home price to grow more than 10% in 2026 after going up by 5% in 2025."

4. Three Main Drivers Behind the Rebound

a. Policy Support: Removed Stamp Duty

• In February 2024, Hong Kong eliminated all extra stamp duties that made it cumbersome for Mainland Chinese and foreign buyers.
• This has increased Mainland Chinese participation enormously—from 10–20% previously to about 50% of unit sales post-removal.
• (01:36) "With those extra charges gone, buying and selling real estate in Hong Kong, especially for mainlanders, is a lot more straightforward and penalty free."
• "Post the removal of the stamp duty, percentage of units that has been sold to mainlanders have gone to 50% of total. Earlier it used to be only 10 to 20%." (01:47)
• Unique Perspective: Praveen calls this a "non-consensus call", challenging market expectations that Hong Kong cannot decouple from negative sentiment in China’s residential outlook. (02:06)

b. Rebounding Demand Fundamentals

• Population growth has turned positive, reaching 7.5 million in H1 2025 after a COVID-driven decline.
• Hong Kong is attracting significant talent, with visa approvals (140,000 in 2025) now double pre-COVID levels.
• New household formation is running above the long-term average.
• Mainland buyers are now a "powerful force" in the market. (02:40)

c. Affordability and Wealth Effect

• Housing affordability has reset; income to price ratio returned to 2011 levels.
• Reduced mortgage rates (as Fed cuts filter through) are re-energizing demand.
• The “wealth effect”: Hang Seng Index’s 30% surge in 2025 historically boosts property investment.
• (03:09) "After years of decline, the housing prices have come to a point where affordability is back to long term average. In fact the income versus the price is now back to 2011 level."
• (03:31) "Hang Seng index climbed almost 30% in 2025. That kind of equity rebound historically spills over into property buying as the recovery in residential real estate picks up speed."

5. Office and Retail Sectors: Renewed Optimism

• The office market, especially central office rents, is "finding its footing" and retail is "improved."
• The blend of all segments improving in one year "marks the clearest green lights this market has seen since 2018." (03:46)

Notable Quotes & Memorable Moments

• On Global Relevance:
  (00:20) "Hong Kong remains one of the world's most globally sensitive real estate markets…when cycle turns here, it often reflects and sometimes predicts broader shift in liquidity, capital flows and macro sentiments across Asia." – Praveen Chaudhary

• On Policy Impact:
  (01:36) "With those extra charges gone, buying and selling real estate in Hong Kong, especially for mainlanders, is a lot more straightforward and penalty free." – Praveen Chaudhary

• On the Depth of the Rebound:
  (03:46) "Big picture Hong Kong property market isn't just stabilizing, it's turning—a 10% or more residential price rebound, a central office market finding its footing, and an improved retail environment all in the same year marks the clearest green lights this market has seen since 2018." – Praveen Chaudhary

Key Segment Timestamps

• 00:01 – Introduction and framing of Hong Kong’s market importance
• 00:39 – Synchronized upturn in residential, office, and retail sectors
• 01:02 – Breakdown of residential market recovery and price forecasts
• 01:36 – Policy shift: scrapping of extra stamp duty, impact on demand
• 02:06 – Non-consensus call vs. consensus market view
• 02:23 – Growing demand fundamentals: population and talent influx
• 03:09 – Affordability returns; mortgage rates and the wealth effect
• 03:46 – Optimism and improvements in office and retail sectors

Tone and Style

The episode maintains an analytical yet approachable tone, combining hard data with succinct explanations and a forward-looking optimism. Praveen Chaudhary uses clear, measurable facts and gently challenges prevailing market skepticism about Hong Kong’s resilience.

Summary:
This episode sheds light on Hong Kong's unexpected property market rebound, highlighting regulatory reforms, favorable economic shifts, and a sharp return of demand from both local and mainland Chinese buyers. Listeners gain unique, data-backed insights that counter prevailing pessimism, outlining why 2026 may mark a turning point for one of Asia’s most globally influential real estate markets.