Hong Kong Developers Accelerate Flat Launches as Sentiment Improves but Risks Remain

Hong Kong’s major property developers are moving quickly to launch new residential projects as market sentiment shows early signs of improvement, a strategy that could test the strength of the city’s fragile housing recovery. While buyer interest has picked up from last year’s lows, analysts caution that a large inventory overhang may limit any sustained rise in home prices.

Developers including Wheelock Properties and Kerry Properties have signaled plans to roll out more than 4,300 new flats during 2026. The move reflects growing confidence that demand is stabilising after a prolonged downturn driven by high interest rates, weak economic growth and cautious household sentiment.

Sales activity in recent months has shown modest improvement, supported by price discounts, more flexible payment terms and expectations that borrowing costs may ease later this year. Some buyers who delayed purchases during the market’s slide are returning, encouraged by developers’ incentives and a belief that prices may be approaching a floor.

However, market analysts warn that optimism may be running ahead of fundamentals. Hong Kong continues to face a sizable stock of unsold new homes accumulated over several years of subdued demand. As more projects are launched, competition among developers is expected to intensify, putting pressure on pricing and margins.

Wheelock and Kerry’s planned launches span multiple districts and price segments, suggesting developers are aiming to capture demand across a broad buyer base. Industry observers say this approach reflects a desire to maintain cash flow and reduce balance sheet risk rather than a conviction that prices will rise sharply.

The broader economic backdrop remains mixed. While tourism and consumption have improved, business investment and job market confidence are still uneven. High mortgage rates, although expected to peak, continue to weigh on affordability, especially for first time buyers.

Analysts note that the pace and pricing of new launches will be critical. Aggressive rollouts with limited discounts could slow sales and add to inventory, while overly deep price cuts risk undermining confidence and resetting market expectations lower. Developers are therefore walking a fine line between clearing stock and protecting asset values.

Government policy remains another key variable. Measures aimed at supporting housing demand, such as easing stamp duties or expanding buyer eligibility, could provide a short term boost. At the same time, authorities remain cautious about reigniting speculation after years of volatility.

For Hong Kong’s housing market, the coming year is shaping up to be a test of resilience rather than a clear recovery. Improved sentiment has given developers an opening to push projects forward, but the sheer volume of planned supply suggests price gains are likely to be modest at best.

As Wheelock, Kerry and their peers bring thousands of new flats to market, buyers are expected to retain strong bargaining power. Whether the recovery can strengthen beyond tentative stabilisation will depend on sustained demand, interest rate trends and how quickly excess inventory can be absorbed.