《Big Bank》 Yueyan: Hong Kong’s property market sees a steadier upward trend in the second half; bullish on Sun Hung Kai Properties (00016.HK) and Sino Land (00083.HK)

HSBC Research released a report stating that the Hong Kong residential market performed strongly in the first half of this year. Property prices have risen by about 10% so far, exceeding the previous full-year growth forecast of 7%. This was mainly supported by improved end-user demand, reduced inventory, and a favorable interest-rate environment. The bank expects the upward cycle in the property market to continue, but the rate of price growth is likely to slow in the second half of the year. Therefore, it has adjusted its year-on-year growth forecasts for Hong Kong residential property prices for 2026, 2027, and 2028 to 10%, 6%, and 5%, respectively (the original forecasts were 7% year-on-year growth for each year).

The bank noted that Hong Kong’s residential market’s structural upward cycle remains intact. With improvements in supply-demand dynamics, increased earnings visibility, and enhanced profitability of property developers, these factors will continue to support the development of the industry. Some well-capitalized developers—especially Sun Hung Kai Properties (00016.HK) -0.500 (-0.441%) short sell $3.66 million; ratio 21.584% and Wharf Holdings (00083.HK) +0.070 (+0.684%) short sell $6.60 million; ratio 39.425%—are seizing the current opportunities to replenish their land reserves at reasonable land costs, reflecting an improving outlook for the industry.

Related content 《Big Bank》 Citi: Hong Kong May retail sales beat expectations; top picks are Swire Properties (01972.HK), Sun Hung Kai Properties (00016.HK), CK Asset (01113.HK), Link REIT (00823.HK)

The bank expects the Federal Reserve to keep interest rates unchanged for the rest of this year through 2027, and does not believe the Fed is “hawkish” as the market interprets it. However, high interest rates are negative for property stocks that are sensitive to interest rates, especially highly leveraged developers. In the short term, property market transaction activity is expected to slow down, as the market needs time to digest changes in the interest-rate path.

HSBC Research maintains a positive view on Hong Kong property stocks, with its top picks being Sun Hung Kai Properties and Sino Land; both have ratings of “Buy.” Given potential risks such as a weakening wealth effect in financial markets and strengthened cross-border regulation, the bank has widened its target NAV discount. It has lowered the target prices for the seven developers it covers by a median of 7.6%, and also made minor adjustments to its core profit forecasts for 2026 to 2028, with changes ranging from a decrease of 4.3% to an increase of 2.9%.

Stock | Investment Rating | Target Price (HKD)
CK Asset (01113.HK) +0.960 (+2.211%) short sell $1.96 million; ratio 15.708% | Hold | 46 → 46.5
Henderson Land (00012.HK) -0.060 (-0.235%) short sell $2.39 million; ratio 38.390% | Buy | 35.8 → 30.6
Kerry Properties (00683.HK) +0.190 (+1.043%) short sell $110.2k; ratio 5.517% | Buy | 24 → 22.7
New World Development (00017.HK) +0.130 (+2.019%) short sell $3.64 million; ratio 33.245% | Reduce | 6.2 → 4.7
Sino Land (00083.HK) +0.070 (+0.684%) short sell $6.60 million; ratio 39.425% | Buy | 14.4 → 13.3
Sun Hung Kai Properties (00016.HK) -0.500 (-0.441%) short sell $3.66 million; ratio 21.584% | Buy | 150.6 → 139.4
Wharf (Holdings) (00004.HK) -0.010 (-0.052%) short sell $1.62 million; ratio 12.713% | Hold | 25.5 → 19.4

(su/da)(Hong Kong stock quotes delayed by at least 15 minutes. Short selling data as of 2026-07-08 12:25.)