Hong Kong's residential property market slowed sharply in the third quarter of 2026, with home transactions falling about 40% quarter on quarter to roughly 13,240, according to Cushman & Wakefield's Q3 review released on 5 October 2026. The figure represents a 21% decline year on year. C&W reported that transactions averaged more than 7,000 per month in the second quarter but dropped to about 4,000 per month from July to September.
Despite the quarterly drop, nine-month transactions still reached 54,052, up 18% year on year. C&W's September Verbal Enquiry Index, a measure of buyer interest, was 35% below its May peak. Edgar Lai, C&W's senior director of valuation and consultancy, said price growth momentum decelerated in the third quarter. Rosanna Tang, head of research, attributed the slowdown to a more cautious stance among buyers as US interest rate expectations shifted. The release refers to a 0.25% Federal Reserve rate rise in September, though Property News Asia has not independently confirmed that decision.
C&W said prices fell 0.8% in July and August combined. However, official Rating and Valuation Department data as reported by Reuters shows a narrower picture: July was revised to a 0.8% monthly fall, the first in 16 months, while August rose 0.06%. Year to date, prices were up about 7% in the first seven months. The C&W wording should be treated as a combined-period summary rather than two separate declines.
In contrast, the office market showed strong momentum. C&W reported 1.4 million square feet of new Grade A office leasing in the third quarter, the highest quarterly level since 2019. Net absorption reached 412,400 square feet, led by banking, financial services, and insurance firms. Grade A availability fell 0.4 percentage points to 19.1%.
Greater Central rents rose 3.0% in the quarter and 13% year to date, with C&W forecasting 12% to 14% growth for 2026. Citywide rents rose 1.7% quarter on quarter. John Siu, C&W's Hong Kong managing director, said he expects the Greater Central trend to continue this year. However, mid-priced offices with net effective rents of about HK$45 to HK$60 per square foot still face headwinds, and 1.2 million square feet of new supply is scheduled for the fourth quarter.
C&W also reported retail sales of HK$266 billion for January to August, up 8.5%, with high street vacancy at 5.4%. Mongkok's vacancy fell to 4.8%, while Tsimshatsui rose to 9.5%. C&W forecasts 67,000 to 68,000 home transactions for the full year, Greater Central office rent growth of 12% to 14%, citywide Grade A rent growth of 5% to 7%, and Grade A office availability of 19% to 20% at year end. These forecasts are C&W's own and are not property or investment advice.
