HK Residential: Expert Call with Midland: Steady as She Goes

We hosted an expert call with Gordon Tse, Buggle Lau and Benny Sham from Midland (1200.HK; not covered) on Hong Kong residential. Midland expects 10% home-price growth in 2026 and positive but smaller growth in 2027, versus Morgan Stanley estimates of +12% and +5%. The luxury segment remains strong, with 148 primary deals above HK$100mn in the first ten months of 2026, a record high, while rentals up 5.4% year to date could keep growing on population inflow. New-launch sell-through is encouraging, demand from mainlanders coming for work or study stays resilient, and no visible demand slowdown followed the new tax implementations. Completed unsold inventory fell to 19k units in 3Q26 from 28k units in 1Q25, easing developers' pressure to discount, and future supply is meaningfully lower than in the previous ten years. Midland believes risks from Shenzhen, affordability and the Northern Metropolis are overestimated. Key risks cited are a weaker equity market, aggressive rate hikes and mai