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Peggy Ye

Hong Kong property developers are expected to report stronger first-half earnings in the coming weeks, buoyed by a rebound in home sales and improving development margins, as investors look for clues on whether the sector’s recovery is sustainable.
Bank of America Global Research expected Hong Kong developers and conglomerates to post average core net profit growth of 8 per cent year on year, excluding New World Development, according to a report published on July 15.
“We expect the Hong Kong [property] sector to deliver a solid set of first-half 2026 results, driven by a strong recovery in depository participant margins, an early rental earnings rebound, and the foreign exchange tailwind from the yuan’s 6 per cent year-on-year appreciation,” said Karl Choi, a research analyst at Merrill Lynch (Hong Kong).
The earnings improvement comes after Hong Kong’s residential market staged its strongest first-half performance in more than two decades.
Citi Research estimated that new-home registrations rose 34 per cent year on year to about 12,500 units, the highest first-half tally since 2004 and a 22-year high. Meanwhile, secondary home volume climbed 43 per cent year on year to a five-year high.
The stronger sales helped lift home prices about 11 per cent this year, supporting developers’ margins and cash flow, according to Citi Research.
“We expect solid first-half 2026 results to provide some downside support as the recovery in development margins begins to crystallise … and stronger cash-flow generation with lower gearing driven by robust first-half property sales,” it said.
Bank of America expected Hysan Development to report the strongest earnings growth at 51 per cent, driven by bookings from its Bamboo Grove project, followed by Henderson Land Development at 16 per cent, CK Hutchison Holdings at 10 per cent and Sun Hung Kai Properties at 8 per cent.
Beyond earnings, investors were expected to focus on dividends and management outlooks.
Bank of America forecast interim dividend increases from Hongkong Land, Swire Properties, Sun Hung Kai Properties and CK Hutchison.
Citi said developers with strong balance sheets, including CK Asset Holdings and Sino Land, could outperform higher-leveraged names even if macroeconomic uncertainties persisted.
The brighter residential outlook was in contrast with the commercial property market, where analysts said the market was divided with demand returning to prime districts while non-core areas were still weighed down by weak leasing activity and a lack of buyers.
Oxford Economics said in a report that Hong Kong’s commercial real estate market was entering “a phase of reset rather than recovery”, with elevated office vacancies likely to keep pressure on earnings even as retail assets showed some signs of stabilising.


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Despite the brighter residential market outlook, commercial real estate continues to be weighed down by a lack of demand in non-core areas


Despite the brighter residential market outlook, commercial real estate continues to be weighed down by a lack of demand in non-core areas.


Hong Kong home sales recovery expected to boost developers’ earnings

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Despite the brighter residential market outlook, commercial real estate continues to be weighed down by a lack of demand in non-core areas

Despite the brighter residential market outlook, commercial real estate continues to be weighed down by a lack of demand in non-core areas