As Morgan Stanley analyzes the residential property markets in Hong Kong and Singapore, it highlights a pronounced divergence in trends that could influence investor decisions. The firm predicts an upcycle in Hong Kong’s residential market that may last four to five years, largely driven by the recent removal of additional stamp duties and the prevailing limited supply of properties. This forecast emerges in the context of a significant correction in property prices, which have decreased by approximately 30% since their peak in August 2021, making Hong Kong increasingly attractive for potential investors.
In stark contrast, Singapore has seen its property prices soar by around 50% during the same period. The disparity in price trajectories positions Hong Kong as a more appealing option for investors seeking value, particularly in light of the dramatic fall in prices that has created more affordable entry points. This situation is further enhanced by the absence of a 64% additional stamp duty on foreign buyers in Hong Kong, a regulatory framework that significantly benefits overseas investors. In Singapore, stringent regulations continue to impose barriers that may deter foreign investment, making Hong Kong a more favorable destination for those looking to enter the real estate market.
Moreover, the current mortgage landscape in Hong Kong offers additional advantages. With mortgage rates expected to drop below 2%, the cost of borrowing for potential homeowners and investors will be markedly lower than in Singapore, where rates hover between 2% and 2.3%. This difference in financing costs not only increases the attractiveness of Hong Kong’s residential market but also emphasizes the cost-effectiveness of acquiring property in the region.
The demand dynamics in Hong Kong are further underscored by the notable presence of mainland Chinese buyers, who accounted for 21% of total sales volume as of early 2025. This influx highlights the growing interest in a market that has become less encumbered by taxes on foreign investments. The trend indicates a shift towards a more favorable climate for investment, as foreign buyers are drawn to the opportunity to capitalize on lower prices and reduced regulatory burdens.
Given these factors, Morgan Stanley’s analysis suggests that investors may find Hong Kong to be a more compelling option compared to Singapore’s increasingly expensive and regulated market. The combination of declining prices, favorable mortgage rates, and the absence of punitive taxes positions Hong Kong as a prime candidate for residential investment in the coming years.
As the market continues to evolve, potential investors must consider these critical factors when making decisions in the residential property landscape, particularly as Hong Kong appears to be on the cusp of a significant recovery and growth phase. The distinct advantages presented by Hong Kong reinforce its status as an attractive hub for residential real estate investment in the current economic climate.
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News Source: Edgeprop
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