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Hong Kong's residential property market lost some momentum in July, with home prices declining for the first time since March 2025 amid pressure from weaker stock markets and tighter investment restrictions in mainland China.

Private home prices in Hong Kong fell 0.5% in July, according to data released by the Rating and Valuation Department on Thursday. The decline followed a revised 0.2% rise in June.

Despite the monthly drop, residential property prices have gained 7.3% in the first seven months of 2026 and remain 12.8% above their March 2025 low.

Property Market May See Short-Term Consolidation

Realtors expect Hong Kong's housing market to enter a period of short-term consolidation following its extended recovery.

Demand has faced fresh pressure from a correction in equity markets and tighter restrictions imposed by China on outbound investment, which have weighed on buying activity.

Hong Kong's property market has nevertheless benefited from improving sentiment, strong stock market performance and steady demand from an increasing number of mainland Chinese professionals.

An easing oversupply of homes has also provided support to the market.

Hong Kong remains one of the world's least affordable housing markets. Residential property prices recorded their first annual increase last year after plunging nearly 30% from their 2021 peak.