Hong Kong economic activity is set to slow in 2026. GDP growth is forecasted to rise modestly as capital markets adjust to the end of the interest rate cuts. A recent CBRE report highlights the challenges ahead for the region.
The APAC growth forecast has been revised down to 3.9% in 2026, compared to 4.3% in 2025. This slowdown is primarily due to weaker performances in China and Japan.
Despite this, CBRE expects capital market investments in APAC to rise by 5% to 10% YoY in 2026, driven by stronger net buying intentions from investors.
Capital Markets Trends
Investors in mainland China and Hong Kong have shown stronger net buying intentions compared to the previous year. Investors in Singapore, Hong Kong SAR, and landlords in Australia and Korea have adjusted their strategies, focusing on strong rental growth and increasing leasing demand.
For the first time since 2020, office assets have emerged as the top investment sector. This is a reflection of improving leasing activity in key CBDs. Investors are increasingly prioritizing rental income over capital value growth.
Slower Growth in Key Sectors
Hong Kong’s commercial property market remains strong, with consistent demand for office space and rising rents in prime locations. However, the retail and industrial property sectors face challenges. Retail rents are expected to see slower growth, although recovery is anticipated in 2026 as consumer confidence improves.
Future Outlook
Despite a slowdown in Hong Kong economic activity, the country’s robust financial infrastructure and dynamic real estate market will support steady growth. Investors continue to seek long-term opportunities in property redevelopment and repositioning, areas that still show potential despite a cooling market.
