Increased demand from affluent customers drives three-year peak in villa and luxury home sales in Hong Kong
In the first half of 2025, the sales of villas, bungalows, and luxury homes in Hong Kong have experienced a significant surge, reaching a three-year high with 286 transactions for homes valued at more than HK$500 million. This upward trend is attributed to a combination of factors, including an influx of wealthy immigrants, improved market sentiment, attractive pricing, insufficient new supply, and strong performance in specific luxury projects.
According to Yeung Ming-yee, senior associate director at Centaline Property – a major source for real estate data and analysis in Hong Kong – the increased number of high-net-worth individuals moving to Hong Kong under relaxed immigration rules, such as the investment immigration policies, has boosted demand for luxury real estate. The improved sentiment in both the property and stock markets, fueled by expectations around an interest rate reduction cycle, has also encouraged both buyers and investors to actively enter the premium luxury housing market.
Despite a projected slight drop (0%-5%) in luxury home prices for properties valued between HK$20 million to HK$40 million, including an increased availability of distressed units sold at reduced prices, cash-rich buyers have found opportunities to acquire luxury assets more affordably. This price adjustment has made luxury properties more attractive.
Yeung Ming-yee explained that developers have delayed the launch of new luxury projects over the past three years, leading to insufficient supply in the primary market. As a result, the total transaction value of the primary market is currently 48.1% lower compared to the same period last year, sitting at HK$4.4 billion. The delayed launch of new luxury projects, coupled with sustained demand for premium properties in key locations, has kept primary-market transactions at a relatively low level of around 30 deals.
However, the sales value of the property fell by 15.3% to HK$12.34 billion over the same period, with a significant decline in the sales of primary homes valued at more than HK$500 million. Despite this decline, the increase in villa sales is believed to be driven by an influx of wealthy immigrants.
The city government's relaxation of investment immigration rules and the start of an interest rate reduction cycle are supporting the increase in luxury home sales. High-profile projects such as Deep Water Pavilia have seen remarkable sales, reflecting strong demand for super-luxury residences on Hong Kong Island, which also supports overall confidence in the luxury sector.
Overall, the rise in sales of villas, bungalows, and luxury homes in Hong Kong during the first half of 2025 is driven by a combination of increased wealthy immigration, improved market confidence supported by expected interest rate cuts, more attractive prices due to distress sales, limited new supply, and sustained demand for premium properties in key locations. This trend is expected to continue as long as these factors remain influential in the market.
- The rise in luxury home sales in Hong Kong during the first half of 2025 is also driven by an increase in high-net-worth individuals investing in real estate, a result of relaxed immigration rules and investment immigration policies.
- improved market sentiment, fueled by expectations around an interest rate reduction cycle, has not only prompted buyers but also investors to invest in the premium luxury housing market, including financing for luxury real estate purchases.
