In recent years, the price trends in the Hong Kong property market have shown notable shifts. Research data from Midland Realty highlights that since early 2005, new development prices typically commanded a premium of around 42% over secondary market prices in the same districts. However, this premium gradually narrowed and stabilized between 10% to 20%. It wasn't until the second and fourth quarters of 2014 that Hong Kong saw new development prices first aligning with or dipping below secondary market levels, albeit with premiums not exceeding 5%.

Subsequently, new development prices saw a resurgence in the following years, approaching secondary market levels by the latter half of 2018. Since the third quarter of 2022, following the fifth wave of the pandemic, Hong Kong's property market has experienced eight consecutive quarters where new development prices have trailed those of the secondary market, with the 12% price differential in the second quarter of this year marking the highest recorded since 2005.

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Analysts from Midland Realty attribute this trend to the persistently high supply of new developments in Hong Kong, placing pressure on developers to adopt lower pricing strategies to attract buyers. For instance, the redevelopment project "The Highline" at 350 Nathan Road in Jordan announced in late April this year revealed initial unit prices averaging HK$19,388 per square foot, approximately 21% lower than the average transaction prices of secondary estates in the same district.

Regarding market demand, Midland Realty's chief analyst points out that developers must offer significant discounts to attract more buyers. They anticipate that future market trends will hinge on the performance of the secondary market and changes in interest rates. Currently, demand remains concentrated in the primary market, with developers expected to maintain approximately a 10% pricing advantage.

Looking ahead, the Hong Kong property market is expected to continue facing challenges of oversupply. Developers may continue employing a "quantity first, pricing later" strategy to navigate market uncertainties. Midland Realty forecasts that primary market transactions for the whole year could reach approximately 18,000 units, a 71.8% increase from last year, marking a five-year high. However, despite new developments attracting buyers, secondary market transactions may experience a slight decline, with the overall transaction volume for the year expected to reach about 42,000 units, up approximately 17.5% from last year.

In terms of price trends, barring significant interest rate changes, the property market is anticipated to see an annual decline of about 5% due to primary market launches starting below market levels.