Hong Kong home sales recovery expected to boost developers’ earnings

Despite the brighter residential market outlook, commercial real estate continues to be weighed down by a lack of demand in non-core areas

Hong Kong property developers are expected to report stronger first-half earnings in the coming weeks, buoyed by a rebound in home sales and improving development margins, as investors look for clues on whether the sector’s recovery is sustainable.

Bank of America Global Research expected Hong Kong developers and conglomerates to post average core net profit growth of 8 per cent year on year, excluding New World Development, according to a report published on July 15.

“We expect the Hong Kong [property] sector to deliver a solid set of first-half 2026 results, driven by a strong recovery in depository participant margins, an early rental earnings rebound, and the foreign exchange tailwind from the yuan’s 6 per cent year-on-year appreciation,” said Karl Choi, a research analyst at Merrill Lynch (Hong Kong).

Citi Research estimated that new-home registrations rose 34 per cent year on year to about 12,500 units, the highest first-half tally since 2004 and a 22-year high. Meanwhile, secondary home volume climbed 43 per cent year on year to a five-year high.

The stronger sales helped lift home prices about 11 per cent this year, supporting developers’ margins and cash flow, according to Citi Research.