Stock market leads home prices by more than 2 months on average over the past five years

HONG KONG, 28 January 2026 – The Hang Seng Index (HSI) leads movements in residential capital values by an average of 2.2 months, according to JLL's latest Hong Kong Residential Sales Market Dynamics released today. The lag largely reflects the lower liquidity of the property market and delays in transaction registration. The findings underscore the strong correlation between equity market performance and residential capital values.

Data shows that, since June 2020, the HSI and residential capital values have generally moved in tandem. However, their trajectories began to diverge in July 2024: while the HSI continued to rebound, residential capital values did not rise concurrently but instead recorded a markedly narrower decline, followed by a modest recovery beginning in August 2025. This pattern suggests that, despite differing magnitudes of volatility between equities and housing, their overall directional alignment has largely persisted.

Norry Lee, Senior Director of Projects Strategy and Consultancy at JLL in Hong Kong, said: "Reflecting the strong performance of the equity market, Hong Kong's residential sector is expected to see near-term support. Anticipated interest rate cuts from 2026 could further strengthen investor sentiment. However, historical trends indicate that housing prices typically lag, adjusting more slowly than equity markets. Although conditions are improving, the high level of unsold inventory and ongoing macroeconomic uncertainties continue to weigh on the pace of recovery, warranting a cautious outlook."

In 2025, the HSI rebounded by 27.8%. Average daily turnover on the HKEX rose to HKD249.8 billion, an increase of approximately 90% y-o-y. In line with the equity market's gains, full year transaction volume in the secondary residential market reached 42,292 units, representing an 16.9% y-o-y increase. Total considerations amounted to HKD299.0 billion, up 14.4% from the previous year.

Cathie Chung, Senior Director of Research at JLL in Hong Kong, said: "Historical trends in the annual average daily stock-market turnover volume and domestic secondary residential transaction volumes illustrate a sustained positive relationship between two markets over the past decade."

"The synchronised movement between the stock and housing markets is largely attributable to the wealth effect. According to the Retail Investor Study 2023, around 58% of Hong Kong adults participate in the stock market, continuing a steady upward trend from previous years. As equity portfolios appreciate, investors perceive an increase in their net worth, strengthening financial confidence and encouraging portfolio diversification. Capital gains from equities often translate into liquidity that flows into tangible assets, particularly residential properties, which remain a preferred investment class in Hong Kong. While relationship does not imply direct causation, historical data clearly demonstrates a strong co-movement between the two markets, reflecting broader macroeconomic sentiment," she added.