Published on and written by Cyril Jarnias
Hong Kong’s Secondary Residence Market
The secondary residence market in Hong Kong is generating increasing interest despite global economic uncertainty, attracting both local and international investors seeking real estate diversification.
Why This Growing Interest?
Indeed, this phenomenon can be explained by a unique combination of factors:
- The scarcity of buildable land
- Government policies directly impacting property accessibility
- Evolving purchasing behaviors in response to recent economic shifts
Good to Know:
With limited supply but growing demand, Hong Kong presents a fascinating environment where luxury, wealth strategy, and economic dynamics converge.
This situation offers a unique opportunity to explore investment prospects in this corner of the world.
Why Choose Hong Kong for Your Secondary Residence
Hong Kong’s Economic Dynamism and Real Estate Opportunities
Hong Kong’s real estate market, historically one of the most expensive in the world (approximately HKD 120,000/m² in 2023), is currently undergoing a correction phase, with prices down 29% from their 2021 peak. This situation creates buying opportunities, particularly due to recent decreases in borrowing rates (HIBOR at 2.09% in May 2025) that facilitate credit access and could boost demand. Investors thus benefit from a more accessible market while enjoying a leading international financial hub and resilient economic environment.
Strategic Geographic Position in Asia
Located at the heart of Asia, Hong Kong offers quick access to major regional cities: less than 4 hours flight to Tokyo, Seoul, Shanghai, or Singapore. This exceptional connectivity attracts business travelers and expatriates, making the city ideal for a secondary residence or pied-à-terre.
Cultural Heritage and Urban Vibrancy
Hong Kong stands out for its unique blend of Chinese traditions, British culture, and modernity. Historic neighborhoods like Sheung Wan coexist with Central’s skyscrapers and Mong Kok’s lively night markets. The city offers rich cultural offerings (museums, galleries, festivals) and vibrant nightlife, providing a cosmopolitan and stimulating living environment.
World-Class Infrastructure
- Healthcare systems: internationally renowned public and private hospitals
- Educational institutions: international schools (French International School, ESF, Harrow International)
- Transportation: ultramodern metro (MTR), bus and ferry networks, airport ranked among the world’s best
Neighborhood and Residence Style Diversity
| Neighborhood | Residence Style | Characteristics |
|---|---|---|
| Central/Mid-Levels | Luxury skyscrapers | Business proximity, panoramic views |
| The Peak | Villas and houses | Most prestigious area, greenery |
| Sai Kung | Traditional houses | Seaside atmosphere, ocean access |
| Kowloon | Modern buildings | Dense urban life, local commerce |
| New Territories | Family residences, village houses | Green spaces, more peaceful living |
Favorable Regulatory Framework for Expatriates and Foreign Investors
Hong Kong imposes no major restrictions on property acquisition by non-residents. Foreign investors benefit from high legal transparency and property rights protection, facilitating transactions and remote property management.
Tax Attractiveness
Hong Kong attracts with its advantageous taxation:
- Income tax capped at 17%
- No capital gains tax on real estate
- No wealth tax or inheritance taxes
This tax context constitutes a key argument for secondary or investment property owners.
Key Takeaways:
- Price decline and expected recovery: window of opportunity to invest
- Direct access to all of Asia through geographic position
- Cosmopolitan quality of life, rich in cultural experiences
- Modern infrastructure and premium services
- Wide choice of neighborhoods and residence styles
- Legal security and attractive taxation for foreigners
Hong Kong thus combines dynamism, security, and quality of life, offering an ideal setting for purchasing a secondary residence or strategic real estate investment.
Good to Know:
Choosing Hong Kong for a secondary residence offers numerous advantages, thanks to its economic dynamism that stimulates a flourishing real estate market offering attractive investment opportunities. This region benefits from a strategic position in Asia, just hours away from major Asian metropolises like Tokyo and Singapore, facilitating both professional and personal travel. Hong Kong’s unique living environment is reflected in its rich cultural heritage and vibrant urbanism, blending tradition and modernity. World-class infrastructure, from healthcare to educational institutions, ensures high living comfort. The diversity of neighborhoods and choice between modern skyscrapers and traditional houses allows future owners to find properties matching their expectations and lifestyle. Moreover, the regulatory framework is particularly favorable for expatriates and foreign investors, simplifying property ownership. Finally, tax attractiveness with reduced taxation on income, capital, and inheritances makes Hong Kong even more appealing for establishing a secondary residence.
Essential Neighborhoods for Successful Investment
| Neighborhood | Average Price per m² (approx.) | Main Assets | Transportation | Amenities & International Schools | Appreciation Potential |
|---|---|---|---|---|---|
| Mid Levels / The Peak | 180,000 to 300,000 HKD | Prestigious area, panoramic views, quiet, security | Close to MTR/Bus/Trams | Numerous international schools | Stable high-end market |
| Repulse Bay / Stanley | 120,000 to 220,000 HKD | Seaside, residential atmosphere sought by expatriate families | Bus/Mini-bus, quick road access | Proximity to French and Anglo-Saxon schools | Strong family rental demand |
| Sai Kung / Clearwater Bay | 60,000 to 120,000 HKD | Green spaces, relaxed seaside living | Bus/Mini-bus | Fewer schools on site but dedicated school buses | Upside potential through redevelopment |
| Quarry Bay / Taikoo Shing | ~80,000–150,000 HKD | Modern housing, proximity to business districts & shopping centers (Cityplaza) | Direct MTR | Delia School of Canada nearby | Ongoing gentrification effect |
| Kowloon Tong | ~100,000–200,000 HKD | University proximity, chic residential atmosphere | MTR/Bus | International Christian School & others | Historical stability + new urban projects |
| Ma Wan (Park Island) | Approximately 60,000–90,000 HKD | Private pedestrian island with direct ferries to Central/Tsing Yi; secure family environment | Ferry/bus only | Local preschools; buses to international schools | Emerging market targeting young families |
| Tseung Kwan O South/LOHAS Park | 50,000–100,000 HKD | Continuous new development; renovated waterfront; modern facilities | Direct MTR Tseung Kwan O line | Modern shopping centers (The LOHAS), new English/French preschools in neighboring district | Strong long-term potential through new projects |
Key Attractiveness Factors by Neighborhood:
Proximity to Public Transportation:
Areas like Quarry Bay, Taikoo Shing, or Tseung Kwan O offer direct MTR access and facilitate quick reach to business centers.
Ma Wan is unique as it’s only served by ferry or private shuttles.
Local Amenities:
Newer neighborhoods (LOHAS Park, Sai Kung) stand out with their next-generation public sports facilities and modern shopping centers.
Historic neighborhoods (Mid Levels, Repulse Bay) offer green settings with high-end shops.
Accessibility to International Schools:
Marked concentration around the south of the island (Repulse Bay/Stanley), Mid Levels and Kowloon Tong where several major international institutions are located.
Some new neighborhoods like Tseung Kwan O are betting on recent creation of bilingual or English-speaking schools to attract expatriate families.
Investor Testimonials:
“We chose LOHAS Park for its direct proximity to the MTR and quality sports facilities. The neighborhood attracts a new generation of expatriates looking for more space without moving far from the center.”
Caroline L., French investor
“After visiting several traditional upscale areas like The Peak or Repulse Bay – beautiful but expensive – we opted for Ma Wan. This atypical choice allowed our family genuine secure pedestrian quality of life. The family rental potential here is clearly underexploited.”
Samuel W., British investor
Impact of Government Policies/Regulations:
- Recent strengthening of tax control on non-resident purchases through additional duties (“Buyer’s Stamp Duty”).
- Occasional tax incentives favoring certain new developments in the New Territories to decongest the main island.
- Strict regulations regarding short-term rentals like Airbnb in some older residential districts to preserve local social fabric.
Key Points to Remember:
Investing in a dynamic secondary neighborhood requires careful analysis between current price/m², future potential linked to new public infrastructure, and local international school attractiveness. Alternative choices off the beaten path can offer better rental yield while limiting volatility associated with Hong Kong’s traditional ultra-premium market.
Good to Know:
For successful investment in Hong Kong’s secondary residence market, discover Mid-Levels and Kowloon Tong neighborhoods, renowned for their accessibility and lucrative potential. Mid-Levels, located near Central, offers excellent public transportation connectivity and easy access to prestigious international schools, with average prices around HKD 180,000/m² and stable appreciation potential due to consistent demand. Kowloon Tong, appreciated for its green residential setting and large family properties, displays prices around HKD 130,000/m², more affordable but promising, reinforced by local amenities like shopping centers and parks. According to investor testimonials, these neighborhoods also benefit from government policies promoting sustainable real estate development, thus increasing long-term attractiveness.
Keys to Success for Investing in a Hong Kong Secondary Residence
Understanding the Hong Kong real estate market is essential before any investment or acquisition process, as this market is characterized by high volatility and increased sensitivity to global and local economic developments. Currently, Hong Kong property prices have been declining for several consecutive quarters, mainly due to rising mortgage interest rates, global economic slowdown, and departure of many qualified professionals. This situation has led to a marked decrease in transactions and brought real prices back to their 2012 levels.
Current Trends:
- Private housing prices declined for the fourth consecutive month in March 2025.
- Demand is slightly recovering thanks to interest rate stabilization and recent easing of some market restrictions.
- Sales volume in both new and existing properties saw significant rebound in first quarter 2025.
- Despite everything, confidence remains fragile due to increased international competition and unfavorable global geopolitical context.
The importance of thorough market research is essential to identify:
- Neighborhoods still showing attractive potential (transportation proximity, international schools…)
- Detailed price evolution by district (some segments are more resilient than others)
- Rental trends by property type
Comparative Table: Recent Residential Market Evolution
| Indicator | Q1 2024 | Q1 2025 |
|---|---|---|
| Average housing price | Sharp decline | -7.76% annual |
| New property transaction volume | Low | +35.8% |
| Existing property transaction volume | Low | +19.3% |
| Construction completions | Decline | +75% |
To access the market under these complex conditions:
- Consult a competent local real estate agent, with deep knowledge not only of trends but also Hong Kong’s regulatory framework
- Prefer those with:
- Official license
- Verifiable track record (experience with international buyers)
- Strong client recommendations
List – Criteria for Choosing Your Real Estate Agent:
- Perfect mastery of local administrative process
- Transparency about fees charged
- Ability to negotiate effectively with local property owners
Financial aspects should not be underestimated: it’s imperative to calculate all additional costs related to purchasing or maintaining a secondary property:
Main Additional Costs:
- Purchase taxes (Stamp Duty)
- Legal/notary fees
- Real estate agency fees
- Recurrent costs: condominium fees, routine maintenance, non-resident owner insurance…
Table – Typical Examples of Additional Fees During Residential Purchase:
| Nature | Estimated Range (%) |
|---|---|
| Stamp Duty | Up to 15% |
| Agency fees | Approximately 1% |
| Legal fees | ~0.1–0.2% |
| Annual fees | Depending on residence/neighborhood |
Diversifying your real estate portfolio also constitutes a prudent strategy facing potential Hong Kong market fluctuations; it’s advisable:
- Not to concentrate all investments on a single segment or neighborhood
- To consider different asset types (residential vs commercial) if possible
The rental option often optimizes profitability: research precisely possible rental yields by property type/location before any acquisition.
Finally, it’s essential:
- To scrupulously respect all local laws regarding occupancy/rental,
- To verify with competent authorities all restrictions applicable to foreigners,
- To regularly analyze potential impact of global economic policies that can abruptly affect market values and rental incomes.
Rigorous professional support along with constant regulatory monitoring remain indispensable to secure any real estate project in Hong Kong within this evolving context.
Good to Know:
Understanding Hong Kong’s real estate market is crucial for successfully investing in a secondary residence, considering current trends and applicable regulations. Thorough market research is essential to identify promising neighborhoods and properly assess prices. Collaborating with a competent local real estate agent can provide valuable insights and simplify the purchase. Financially, calculate additional costs like taxes, legal fees, and maintenance. To diversify your real estate portfolio, account for possible market fluctuations and explore rental opportunities to optimize investment returns. Ensure compliance with local occupancy and rental laws, and understand how global economic policies can influence the local market.
Rental Yield: Case Studies in Hong Kong
Rental yield in Hong Kong heavily depends on current market dynamics, specific neighborhood characteristics, and various structural factors.
| Neighborhood | 2025 Vacancy Rate | Average Gross Yield |
|---|---|---|
| Central/Mid-Levels | ~6% | 2.0 – 2.5% |
| Kowloon (Tsim Sha Tsui, Mong Kok) | ~7% | 3.0 – 3.8% |
| New Territories | >8% | 4.1 – 4.7% |
Rates are indicative and may vary based on property size or transportation proximity.
Current Rental Market
- Hong Kong’s rental market has become very active again in 2024-2025 despite persistent uncertainty about purchase prices.
- Rents are now approaching their pre-pandemic levels; the market is estimated to be only -3% below the August 2019 peak.
- Rental demand is supported by returning expatriates and increased mobility between neighborhoods.
Case Studies – Secondary Residential Properties
- Secondary Apartment in Mong Kok (32 m²)
- Acquisition price: HKD 3,900,000
- Observed monthly rent: HKD 12,800
- Estimated gross yield: (12,800 ×12)/3,900,000 ≈ 3.94%
- Secondary Studio in Sai Ying Pun (28 m²)
- Acquisition price: HKD 4,100,000
- Observed monthly rent: HKD 10,200
- Estimated gross yield: (10,200 ×12)/4,100,000 ≈ 2.98%
In these two typical examples for small urban units, gross yield varies based on neighborhood attractiveness and immediate proximity to MTR or tram.
Factors Influencing Rental Yield
- Geographic location: Neighborhoods near Central or economic hubs show lower yield but better liquidity.
- Public transportation proximity: Direct access to MTR network significantly increases rental attractiveness—up to +15% on rent amount compared to equivalent remote areas.
- Business centers & amenities: Presence of major shopping centers or offices promotes high occupancy rates even during uncertain periods.
Local regulations:
- Hong Kong currently imposes no strict cap on residential rents nor minimum/maximum duration for standard leases.
International Comparison — Average Gross Yield
| City | Average Gross Yield (%) |
|---|---|
| Hong Kong | ~2 – 4.7 |
| London | ~3 – 4 |
| Paris | ~2.8 – 3.6 |
| Dubai | ~5.0 – 6.5 |
| Lisbon | ~4 – 5 |
Hong Kong remains competitive for very central small units but overall shows lower gross yield than emerging markets like Dubai or Lisbon—where new supply is abundant and some tax advantages exist.
To remember:
Hong Kong rental yield remains moderate but stable for well-located compact properties thanks to strong urban demand; however, it suffers compared to destinations offering higher yield and lower regulatory/tax pressure.
Good to Know:
The rental market in Hong Kong shows generally low vacancy rates, with average gross yield around 2 to 3% depending on neighborhoods. Areas such as Mid-Levels and Central offer high rental potential due to their proximity to business districts and key transportation networks. A notable example is a secondary residence in Causeway Bay, where investments often see stable returns, despite regulatory constraints affecting property availability. Comparatively, destinations like London or Paris offer slightly higher yields, but with more pronounced market volatility. Factors such as local amenities, international school attractiveness, and transportation accessibility greatly influence profitability. Investors must remain attentive to legislative developments that can impact yield and acquisition strategies.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
