Home prices in Hong Kong rose to a 28-month high in March as investor confidence ticked up in line with rising capital and fundraising markets.

Official figures released by the Rating and Valuation Department on Tuesday showed that the city's official home price index rose for the 10th consecutive month to 312.8 in March.

That is 1.4 percent higher on a monthly basis and almost 9.8 percent higher than a year ago.

It was also the highest figure since November 2023.

Taking the first three months of the year together, home prices rose by 4.4 percent.

Eddie Kwok, executive director of valuation and advisory services at property consultancy firm CBRE Hong Kong, said market sentiment in the city has "improved markedly" this year, following the booming capital market along with the fundraising activities.

"This reflects a rebuilding of investor confidence in the economic outlook and corporate earnings' prospects, and increased capital inflows have also indirectly supported broader asset market performance," he said.

Kwok also noted that some of the new projects launched by developers saw rapid sellouts or oversubscription within a short period of time, indicating rising demand from both home buyers and investors.

Looking ahead, he expects the city's residential market to continue to remain in an upward trend, with home prices rising by 8 to 10 percent throughout the year.

"Overall, the market is transitioning from an 'inventory digestion phase' to a phase of 'steady recovery', with pricing power gradually shifting from buyers to developers," Kwok said, pointing to recent reduced sales discounts.

Separately, the city's rental gauge rose to 202.2 in March, up by 0.6 percent from a month earlier, and around 4.7 percent higher year on year.

That figure also set a new record for the fifth straight month, according to the data.


Edited by Edmond Fong