Hong Kong Property Stocks Fell 70%, but Housing Is Recovering

A viral chart showing Hong Kong property at levels last seen roughly 30 years ago needs an important clarification. The chart tracks the Hang Seng Property Index. It measures the market performance of listed property companies, not the prices of apartments, houses, offices or other physical real estate across Hong Kong. Bank of America Global Investment Strategy data cited in the chart show the property-stock index falling roughly 70% between its April 2019 peak and April 2025 trough. That decline brought the index back toward levels seen about three decades earlier. The selloff reflected several major pressures on Hong Kong developers. Higher interest rates increased financing costs, commercial property valuations weakened, office vacancies rose, developers accumulated large debt burdens and the local economy went through pandemic-era and geopolitical disruptions. Hong Kong's physical housing market also experienced a serious correction, but nowhere near the 70% shown in the stock-market chart. Residential prices fell nearly 30% after reaching their peak in 2021. More recent official data show a significant turnaround. Private home prices increased for a 13th consecutive month through June and gained 7.9% during the first half of 2026. Prices reached their highest level since September 2023. Demand has been supported by improving financial-market sentiment, purchases from mainland Chinese professionals and a reduction in housing oversupply. Stronger equity markets have also helped restore confidence among buyers. The commercial property sector remains more challenged. Overall Hong Kong office valuations and rents have fallen by more than 50% since 2019. High vacancy rates and large amounts of available space continue to pressure landlords in several districts. However, even the office sector is showing early signs of stabilization. Prime Grade-A properties in Central have benefited from stronger financial-market activity, new leasing by banks and hedge funds, and r