According to the latest issue of RLB Construction Cost Update HK Report, while upward adjustment remains possible, the tender price index in 2026 is expected to move within a relatively narrow range.
Hong Kong’s economy recorded robust growth in the first quarter of 2026, supported by sustained external trade
performance and an improvement in domestic demand. Against this favourable macroeconomic environment, the
construction sector experienced a significant rebound, recovering from a year-long decline in 2025. This recovery is
reflected in a 6.9% year-on-year increase in total building and construction expenditure. Notably, public sector expenditure
surged by 41.2% year-on-year, driven by accelerated infrastructure development. Nevertheless, private sector expenditure
continued to contract, recording a 24.6% year-on-year decrease, reflecting sustained caution among developers amid
elevated financing costs and subdued market sentiment.
The 2026-27 Budget reaffirmed the government’s commitment to infrastructure development and the Northern
Metropolis (NM). On the infrastructure front, notable completed projects include the new departure facilities at Terminal
2 of Hong Kong International Airport and the intermodal pier under Phase 1 of the HKIA Dongguan Logistics Park, both
completed at the end of May 2026. The NM remains central to Hong Kong’s long-term development strategy, providing
land for housing and the innovation and technology sector (I&T). Site formation for San Tin Technopole and Hung Shui Kiu
is scheduled for completion in 2026, with funding to be sought for subsequent phases. To accelerate development, the
government is adopting a large-scale land disposal approach with flexible payment arrangements and plans to introduce
dedicated legislation for the NM by mid-2026.
The Government will make available land for approximately 98,000 private housing units over the next five years, with the
coming year’s Land Sale Programme comprising nine residential sites and a total land supply capacity of around 22,000
units. Through this commitment to land supply along with the ongoing growth in the technology sector and service
exports, Hong Kong’s economic outlook remains generally stable. The Middle East conflict has contributed to upward
pressure on inflation through increased fuel surcharges and logistics costs. However, this impact is partly mitigated by the
competitive environment in the construction market, where contractors continue to bid aggressively for available projects.
While upward adjustment remains possible, the tender price index in 2026 is expected to move within a relatively narrow
range.
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