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Cheryl Arcibal

The Hong Kong property market’s recovery is forecast to moderate in both prices and rents in the coming months as disruptions brought about by artificial intelligence, slower population inflows and other factors are likely to impact the upturn, according to UBS.
The Swiss investment bank said that in addition to AI and slower population growth, the city’s residential market could also be affected by the deepening integration of the Greater Bay Area, as well as incoming supply of new homes in the Northern Metropolis.
“We believe the market has yet to fully price four key risks to the Hong Kong property market,” said Mark Leung, UBS Greater China property research analyst.
In the bank’s base case, home prices are likely to remain broadly flat in the second half of the year and in 2027, while rental increments were likely to slow down starting in 2028, Leung said.
Since they peaked in September 2021, secondary home prices had fallen by as much as 28.4 per cent at their trough in March last year, data from the Rating and Valuation Department showed. From its lowest, the official home price index had recovered 13.4 per cent, according to the latest government data.
Rents, meanwhile, had been hitting new highs for the eighth month straight as of June, according to the department’s data.


UBS said that AI is affecting job opportunities for graduates, which had fallen by more than 70 per cent since 2023, leading to higher youth unemployment.
The deepening integration of the Greater Bay Area – an economic and business development zone encompassing Hong Kong, Macau and several cities in Guangdong province – could also accelerate cross-border migration on account of better transport connectivity and weakening income in Hong Kong as residents look for cheaper housing and the population ages.
Likewise, Hong Kong’s housing supply is only likely to fall short for four years, shorter than the previous 12-year upcycle amid a net population inflow that averaged 32,000 per annum in 2023 to 2025, below the 153,000 required to reach the government’s 2042 town planning target of 9.6 million.
“Interest-rate uncertainty and tighter cross-border investment controls could limit further house price appreciation,” Leung said.
On the other hand, property consultancy JLL forecast stable home prices this year, with demand from mainland Chinese buyers remaining steady.
“Currently, AI is mainly used to handle tasks that are highly repetitive, such as clerical or administrative work,” said Norry Lee, senior director of projects strategy and consultancy at JLL.
“In the short term, there is little direct impact on residential demand. The residential market still comes down to fundamentals like supply, demand and interest rate movements.”


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Amid AI’s impact, slower population growth, regional integration and newly built homes, investment bank says property prices likely to remain flat


Amid AI’s impact, slower population growth, regional integration and newly built homes, investment bank says property prices likely to remain flat.


Is Hong Kong’s property market recovery running out of gas? UBS flags 4 risks

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Amid AI’s impact, slower population growth, regional integration and newly built homes, investment bank says property prices likely to remain flat

Amid AI’s impact, slower population growth, regional integration and newly built homes, investment bank says property prices likely to remain flat