Hong Kong’s residential property market is extending a steady recovery, with key price gauges approaching levels last seen nearly three years ago, even as analysts warn momentum is likely to moderate in the coming quarter. The Centaline City Leading Index (CCL), which tracks secondary private home prices, rose for a fourth straight week to 159.94, up 0.57% on the week and 1.58% over the past month, marking its highest reading since around September 2023. The index has gained about 10.98% so far this year, underscoring a strong rebound in the second-hand segment.

Market data suggest the upswing is broad-based across different flat sizes, with larger units showing particular strength recently. Sub-indices for large housing estates and small-to-medium units advanced 0.61% and 0.43% respectively over the week, each climbing for a second consecutive week to near three-year highs. Prices of large units rose 1.25% in the latest week, extending a three-week gain of 3.01% to reach a two-and-a-half-year high. Regionally, Kowloon led with a 1.31% weekly rise to a near three-year high, while Hong Kong Island added 1.12% over the week and 2.34% across two weeks. New Territories East and West slipped 0.38% and 0.24%, ending their recent upward runs.

The official Rating and Valuation Department’s private home price index paints a similar picture of sustained recovery over a longer horizon. The index climbed 1.42% in the latest month to 321.9, its 12th consecutive monthly gain and a 12.36% increase from a year earlier. For the first five months of the year, official prices are up 7.44%. Still, both the CCL and the official gauge remain below their 2021 peaks: the CCL is about 16.41% under its August 2021 record of 191.34, while the government index is roughly 19.14% shy of its September 2021 high of 398.1, highlighting the distance yet to recover from the last cycle’s top.

Smaller units continue to outperform. Prices for A, B and C category flats — those up to 1,076 square feet — advanced 1.47% month on month and 12.57% year on year to 324.2 on the official scale, the highest level in about 32 months. Larger D and E category units of 1,076 square feet or more also rose, but at a slower clip, with their index up 1.17% on the month and 8.99% on the year to a roughly 31‑month high of 284.9. In the secondary market, sentiment is being reinforced by record-setting deals: at Yuet, a redevelopment project in Cheung Sha Wan near the MTR station, a one‑bedroom flat recently changed hands for HK$6.088 million, or HK$17,394 per square foot on a usable basis, the highest price per square foot recorded in the estate’s second-hand market. The seller, who bought in the first launch about two years ago, booked a paper gain of more than HK$870,000, illustrating improving prospects for recent purchasers.

That momentum, however, is colliding with a more uncertain macro backdrop and shifting financial conditions. Since late May, tightened action by mainland regulators against illegal cross-border investment has weighed on Hong Kong equities, with continued stock market weakness and slower first-hand project sales feeding into more protracted bargaining in the secondary segment. Concerns that the US may raise interest rates again have also contributed to a more cautious tone among buyers. Centaline analysts expect the pace of home-price gains to slow from the latter part of the third quarter, as the earlier surge gives way to more selective demand.

Financing dynamics are another source of restraint. According to industry commentary, an easing of tensions in the Middle East has coincided with capital outflows from Hong Kong, pushing interbank rates higher and reducing the scope for further cuts in mortgage costs in the near term. With prices having already rebounded, rental yields have edged lower, prompting some potential investors to reconsider the timing of their purchases. Even so, the leasing market remains firm: the official rental index reached 204.1 in the latest month, up 0.34% and notching its seventh straight advance to a record high, 5.1% above a year earlier and about 1.8% higher over the first five months of the year.

For now, the data point to a housing market that has clearly emerged from its recent trough but is still some distance from its historic highs, with gains increasingly vulnerable to shifts in global interest-rate expectations and equity-market sentiment. Developers face the added challenge of new supply from large-scale projects in coming years, which could divert some demand away from the secondary sector. With both price and rent indices on multi‑month winning streaks, the balance between affordability, financing costs and investment returns is likely to determine how durable Hong Kong’s latest property upswing proves to be.

Hong Kong’s national security police have arrested the operators of Hunter Bookstore, one of the city’s best-known independent bookshops, in a move that underscores rising pressure on small publishers and retailers carrying titles deemed politically sensitive by authorities. Police said they detained a 33‑year‑old woman and a 32‑year‑old man on June 24 on suspicion of “acts with seditious intention” and handling property believed to represent the proceeds of an indictable offence. Local media identified one of those arrested as former district councillor and Hunter Bookstore founder Winnie Ho, though police did not name the suspects in their official statement.

Officers from the National Security Department searched the Hunter Bookstore premises in Sham Shui Po on Wednesday evening, according to police and local media accounts. More than a dozen officers were reported to have entered the shop, pulling down its metal shutters and removing stickers from the windows, while checking the identities of customers and passers-by. Police said they seized a batch of items, books and documents they described as having “seditious intention,” alleging that materials on display or for sale incited hatred against the Hong Kong Special Administrative Region government, the judiciary and law‑enforcement agencies, in breach of Article 24 of the city’s Safeguarding National Security Ordinance.

Authorities also said the two suspects were believed to have received multiple remittances from foreign political organisations, and indicated they are investigating potential violations of Hong Kong’s Organized and Serious Crimes Ordinance. Convictions for acts with seditious intent can carry sentences of up to seven years in prison, while handling property believed to be derived from an indictable offence can draw terms of up to 14 years. Local reports cited the presence of a biography of jailed media tycoon Jimmy Lai and works by political cartoonist Zunzi among the titles removed by police; similar books were previously described by pro‑Beijing outlets as “soft resistance” publications when criticising so‑called “yellow” bookstores that supported the 2019 protest movement.

The raid on Hunter Bookstore comes three months after national security officers searched another independent outlet, Yat-Chuen Bookhouse, and arrested its operator and three staff members over the display and sale of the same Jimmy Lai biography. All four were later granted bail, but the case sent a chill through Hong Kong’s small ecosystem of independent booksellers, many of which stock social and political titles alongside general literature. Ho has previously said that government departments carried out dozens of inspections and other actions targeting Hunter Bookstore over several years, even before the latest operation, as authorities and pro‑government media stepped up scrutiny of shops perceived to hold pro‑democracy views.

Ho, a former journalist and member of the now‑disbanded Civic Party, opened Hunter Bookstore after resigning her Sha Tin District Council seat and withdrawing from frontline politics in 2021. She has described the shop’s name, drawn from the Japanese manga “Hunter × Hunter,” as a statement against passivity, and has publicly argued that books should remain “open” and “free” unless and until explicitly banned. In interviews, she acknowledged a climate of fear among publishers and readers but said she sought to maintain a space for discussion within the narrowing bounds of Hong Kong’s legal environment. The latest arrests mark a further escalation in the city’s approach to independent bookshops, reinforcing a message that even small‑scale retail operations risk national‑security scrutiny over the choice of titles they carry and the sources of their funding.