Citi issued a research report stating that the 2026 Long Term Housing Strategy strengthens its positive view on Hong Kong's residential market, as private supply tightens while demand remains resilient. The ten-year supply target is 420,000 units, of which 126,000 are private units, a 5% annual decrease and 34% lower than 12 years ago; demand forecast remains largely stable at 419,000 units. Non-local student demand increases 45% year-on-year, offsetting the slowdown in household formation demand.
The bank believes official demand assumptions are conservative, expecting only 186,800 new households from 2027 to 2036, compared to a population increase of just 2 million from 2015 to 2025 but 304,000 new households. On the other hand, demand from talent and student inflows has room to rise, and associated tax reforms could become a potential short-term catalyst to attract financial professionals.
Regarding private residential properties, the bank expects private residential completions in 2027 to drop to about 15,400 units, remaining at a similarly low level through 2028. It also forecasts annual residential sales volume to rise 3% year-on-year to 21,100 units this year.
The bank maintains a positive outlook on the property market for next year, expecting property prices and rents to rise 6% in 2027. The market may be affected in the short term by high U.S. interest rates; rental performance is expected to outperform developers in the fourth quarter of this year. The bank's recommended stocks are Swire Properties (01972), Wheelock Properties (01997), Link REIT (00823), and Sun Hung Kai (00016).
Currently, the Hang Seng Index stands at 24,133, down 147 points or 0.6%, with main board turnover exceeding HK$46 billion. The Hang Seng China Enterprises Index is at 8,070, down 58 points or 0.7%. The Hang Seng Tech Index is at 4,181, down 41 points or 1%.
| Stock (Code) | Current Price (HK$) | Change (%) |
|---|---|---|
| Sun Hung Kai (00016) | 105.7 | Up 1.25% |
| Henderson (00012) | 25.8 | Up 0.94% |
| CK Asset (01113) | 45.32 | Up 0.22% |
| New World (00017) | 5.52 | Up 0.36% |
| Kowloon Properties (01997) | 30.16 | Up 1.07% |
| Link REIT (00823) | 36.84 | Down less than 0.1% |
| Hysan (00014) | 15.41 | Up 0.65% |
| Hang Lung Properties (00101) | 6.58 | Up 0.77% |
| Swire Properties (01972) | 23.92 | Up 0.67% |
| Kerry Properties (00683) | 17.7 | Up 1.09% |
| Sino Land (00083) | 10.06 | Up 0.3% |
