Hong Kong Home Prices Jump Most In Three Years As City Raises Stamp Duty On Hk$100m Homes

by WANG Yuhan

Hong Kong's property market has started 2026 with a sharp rebound, prompting the government to raise stamp duty on ultra-luxury properties in what officials describe as a revenue measure rather than renewed tightening.

Data from Midland Realty show 175 primary-market transactions between the first and 10th day of the Lunar New Year, up 27.7% year on year, the strongest start since 2021. Data tracked by China International Capital Corp (CICC) show secondary-market volumes and prices both rose in January, with home prices recording their biggest monthly gain in three years.

Financial Secretary Paul Chan Mo-po said in the 2026–2027 Budget that stamp duty on residential deals above HK$100 million will increase to 6.5% from 4.25%. The adjustment is expected to affect about 0.3% of transactions and generate HK$1 billion a year. A government source said the move reflects a "those who can afford more should pay more" principle and is not intended to cool the broader market.

Luxury segment drives rebound

Centaline Property data show 60,346 private residential transactions in 2025, up nearly 20% year on year. Of these, 262 involved homes priced above HK0 million, surpassing the previous 2021 record of 228. Total value in the segment exceeded HK.1 billion, up 22%.

More than 80% of such transactions were on Hong Kong Island. A house on Blue Pool Road sold for HK$447 million, underscoring demand for trophy assets.

Mainland Chinese buyers have remained a key force since most curbs were scrapped in 2024. Centaline recorded more than 13,500 mainland buyers in 2025, up from 11,631 a year earlier, based on name-registration data, with total transaction value reaching HK$136.4 billion, both record highs.

A buoyant equity market has reinforced the trend. The Hang Seng Index rose 27.8% in 2025 as Hong Kong regained the top global IPO ranking, boosting wealth effects that have fed into prime property demand.

The momentum has carried into 2026. As of February 25, 48 transactions above HK$100 million had been recorded this year, with total consideration of HK$10.4 billion, far exceeding the 14 such deals in the first quarter of 2025. Some buyers closed deals before the new rate took effect, saving millions in duty.

Limited impact seen

Property analysts view the tax rise as targeted and unlikely to derail the recovery. Chen Yongjie, vice chairman of Centaline Property's Asia-Pacific division, said ultra-luxury deals account for less than 1% of overall transactions and involve scarce assets. "Given limited supply and improving sentiment, owners are unlikely to cut prices," he said.

Thomas Chak, head of capital markets and investment services at Colliers Hong Kong, said the move is understandable given fiscal deficit pressures, adding that Hong Kong remains competitive among global cities in tax and investment terms.

UBS cautioned that developers with sizeable ultra-luxury inventories, including Wharf Holdings, Kerry Properties, Henderson Land and Sun Hung Kai Properties, could face longer sales cycles if mainland demand slows.

Broader recovery broadens beyond luxury

Official data show the private residential price index rose to 301.4 in January, up 0.53% month on month, marking an eighth straight increase and the highest level since mid-2024. The rental index climbed to 201.1, extending gains as leasing demand tightened.

Office leasing has also improved, with January transactions and floor area rising sharply year on year, pointing to firmer business sentiment.

Supply, however, remains elevated. Midland Realty estimates about 26,000 new units could be launched between March and December, much of it in the Northern Metropolis. Analysts say the pipeline may temper rapid price gains, keeping the recovery steady rather than overheated.