SHKP, CK Asset, and Henderson Set to Dominate 60% of Hong Kong’s Small Unit Market
According to JLL, the three developers will provide 60 percent of the new homes in 2025 and 2026, an increase from 40 percent in 2023 and 2024.
According to JLL, three of Hong Kong’s largest property developers—Sun Hung Kai Properties (SHKP), CK Asset Holdings, and Henderson Land—are anticipated to lead the real estate sector. This prediction stems from an observed trend where potential buyers are favoring smaller apartments due to current economic uncertainties.
According to the real estate advisory firm, the group was scheduled to provide 60 percent of new residential properties in 2025 and 2026, an increase from 40 percent between 2023 and 2024.
According to JLL, sales of Class A units—ranging up to 431 square feet—made up over 60 percent of all residential transactions in March, an increase from almost 50 percent recorded in 2024. The reduction in stamp duty introduced in February contributed significantly to these sales.
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Norry Lee, JLL’s senior director of project strategy and consulting in Hong Kong, noted that due to possible fluctuations in interest rates and economic instability, future buyers are shifting towards cautious approaches: they might delay buying decisions entirely or choose smaller, budget-friendly apartments instead. ‘In volatile periods, modest-sized properties have emerged as a more secure option,’ she explained.
In February, the Hong Kong government eased its housing regulations by reducing the stamp duty and setting a flat fee of HK$100 for properties valued at up to HK$4 million (US$516,100). This change enables additional purchasers to take advantage of these perks. Previously, the limit stood at HK$3 million.
SHKP, CK Asset, and Henderson will keep supplying most of the housing units, since mainland Chinese developers and smaller companies have avoided participating in bids for residential land due to the ongoing decline in the real estate market.
For instance, SHKP secured a plot measuring 37,268 square meters (approximately 401,000 square feet) in Tung Chung back in February; this was the final residential parcel offered through public auction by the government. According to their latest annual reports, CK Asset held a land inventory totaling around 7 million square feet, which includes properties from collaborations with other developers, whereas Henderson possessed approximately 10.9 million square feet of developable land as of the close of 2024.
Property developers swiftly modified their approaches, according to JLL, with an increased number of Class A apartments being finished since they ensured sales in the present market conditions.
weak market conditions
“.
Last year, the completion of class A apartments surged to 10,794 units, accounting for approximately 45% of all new homes, according to JLL data. In comparison, only 2,160 such units were completed in 2014, representing just 14%. Projections indicate this trend will continue, with an expected rise to 11,065 units (or 53%) by 2025, followed by further growth to 11,553 units (58%) in 2026.
This trend can be observed with SHKP’s 9,700 units.
Sierra Sea project
In the New Territories, over 700 units were snapped up across the initial three phases. These apartments ranged from 301 sq ft to 702 sq ft and were listed at prices up to 20 percent lower than those of comparable existing properties in the region, as reported by real estate agents.
End-users still show significant interest in smaller apartments as indicated by the positive feedback on newly launched projects,” Lee stated. “As a result, developers are expected to keep focusing on constructing compact units to cater to this ongoing demand.
In spite of strong demand for smaller units, concentrating on this sector presented considerable difficulties, as reported by JLL. An indicator monitoring high-grade residential properties showed
prices
dropped 9.2 percent in 2024, more significant than the 5.6 percent decline in the overall market.
JLL stated that the future direction of the market depends on the complex interaction between supply-side management—like developers’ decisions aimed at maintaining price stability and reducing inventory—and demand-side buying capacity, which is influenced by how significantly the trade war affects Hong Kong’s actual economy.
The present pipeline might exceed absorption capabilities, especially if economic challenges like extended trade conflicts diminish purchaser trust or reduce rental returns, the real estate advisory firm noted additionally.
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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