Title:
A Detailed Long-run Quantitative Analysis of Hong Kong’s Housing Cycles, Supply-demand Balance and Government Policy From the 1980s to 2025–2026

Authors:
LIE Chun Pong, China

Abstract:

This paper examines the evolution of Hong Kong’s private residential property market over more than four decades, from the early 1980s to the 2025–2026 outlook [1-15], through a quantitative and econometric lens. Using official annual statistics on private residential price indices, completions, stock, vacancy, and take-up, this study investigates whether Hong Kong’s housing market displays identifiable long-run cycles, whether supply-demand imbalances help explain price movements, and how government policy has interacted with these dynamics over time. The analysis argues that Hong Kong’s housing market cannot be explained by a simple “housing shortage” narrative alone. Instead, long-run price behaviour has been shaped by the interaction of supply rigidities, demand absorption, inventory pressure, macro-financial conditions, and policy intervention. The evidence suggests five broad phases: an upswing and bubble formation period before 1997, a post-crisis correction from 1998 to 2003, a low-interest-rate recovery from 2004 to 2013, a period of elevated prices under strong policy intervention from 2014 to 2021, and a recent adjustment phase from 2022 onward characterized by higher interest rates, increased completions, and rising vacancy [Appendix 1-4]. The most recent official statistics are especially important for interpreting the current cycle. In 2024, private residential completions rose sharply to 24,260 units, take-up reached about 17,310 units, and the vacancy rate increased to 4.5%, equivalent to about 57,900 vacant units. At the same time, forecast completions remained high at around 20,860 units for 2025 and 20,100 units for 2026 [1-15]. These figures suggest that the market has moved away from a regime of acute scarcity toward one in which structural shortage may still exist in some segments, but short to medium-term inventory pressure has become much more visible [Appendix 1-4]. Our research paper aims to help the Hong Kong gov’t and policy maker to make the suitable decision which therefore contribute to the citizen and the peoples of publics.

DOI: https://doi.org/10.51505/IJEBMR.2026.11001