According to the latest issue of RLB Construction Cost Update HK Report, the tender prices are forecast to experience slight downward pressure in the coming quarters.
During the third quarter of 2025, Hong Kong’s economy demonstrated robust performance, buoyed by ongoing high levels of exports and consistent growth in its domestic demand. Despite this positive macroeconomic backdrop, the building and construction sector continued to contract, marking a year-long period of decline. Total sector expenditure fell by 8.7% year-on-year. This downturn was led by the private sector, which saw a sharp 13.7% year-on-year decrease in spending. Public sector expenditure declined mildly by 2.2% year-on-year, marking a moderation from the steeper decline in the previous quarter.
Policy initiatives outlined in the Chief Executive’s 2025 Policy Address are set to enhance international and domestic transport infrastructure. Notably, the tender for the Kai Tak Smart and Green Mass Transit Systems (SGMTS) was issued in late 2025. Construction is scheduled to commence in 2026, with a targeted completion date of 2031. The major transport development is expected to spur the development of surrounding projects, including supporting infrastructure, residential, and commercial developments. Furthermore, the AsiaWorld-Expo Phase 2 construction is currently underway and slated for completion in 2028.
The total private residential units completed in the first three quarters of 2025 are around 13,400 units. Compared to 24,300 units total in 2024, it is expected a sharp decline from 2024 to 2025. The public sector, sustained by fiscal support for major infrastructure projects, is expected to be the primary source of near-term construction activity. Despite rising public investment, overall market demand continues to decline due to private sector contractions.
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