Ken Lui Predicts Hong Kong Home Prices Fall 20% Over 18 Months as CCL Heads Below 130

Ken Lui's 18-Month Warning on Hong Kong Home Prices

A prominent Hong Kong property commentator has broken ranks with the industry's still-bullish forecasts, predicting that home prices will fall roughly 20% over the next 18 months. Ken Lui, writing in a column carried by Bossmindmedia, says the Centa-City Leading Index (CCL) is likely to break below 150 by the end of 2026 and below 130 by the end of 2027, a trajectory that implies a cumulative decline of about 20% from current levels.

His outlook is more bearish than the two most widely watched agency forecasts. Centaline founder Shih Wing-ching has cut his full-year 2026 gain forecast from 20% to 15%, matching Midland Holdings chairman Ricky Wong's projection. With the CCL at 159.92 and up 10.97% year to date, those forecasts still imply roughly 4% of additional price gains in the final five months of the year — a conclusion Lui explicitly rejects.

Lui's argument rests on interest rates rather than transaction volumes. He notes that the Federal Reserve has left its target range at 3.5%-3.75% for a fifth consecutive meeting, but that the decision passed 9-3, with three regional Fed presidents supporting a 25-basis-point hike. He also flags rising long-term Treasury yields: the 30-year yield has climbed to 5.23%, a 19-year high, and the 10-year has traded at 4.749%. In Lui's view, if the 10-year approaches 5%, Hong Kong buy-to-let property becomes close to a zero-return investment.

The columnist supports that claim with a worked example. On an HK$8 million flat with a 30% down payment, transaction costs push total invested capital to about HK$2.7 million; monthly mortgage and management costs run to roughly HK$28,000, so a rental yield near 4% is needed just to break even. Average residential yields in Hong Kong stand at only about 3.5%. To compete with US Treasuries, Lui says yields would need to reach 5% — implying a price of about HK$5.6 million for the same flat, or a roughly 30% correction. He characterises his own 20% forecast as the optimistic end of that range, not the pessimistic one.

The Yield Math Behind Lui's Bearish Hong Kong Call

The Fed Backdrop Behind Lui's Call

Lui's forecast is explicitly rate-driven, and the facts he cites are checkable. The Fed's fifth consecutive hold is not itself extraordinary, but the 9-3 vote matters: three regional bank presidents wanted a quarter-point hike into a period of elevated — not falling — long-term yields. The 30-year Treasury at 5.23% and the 10-year at 4.749% point to a market that is pricing sticky inflation and heavier government issuance, conditions that would normally keep Hong Kong's own funding costs elevated through the linked exchange rate system.

That is Lui's interpretation, not a proven outcome, but it has a clear transmission mechanism: if US yields stay near current levels, Hong Kong mortgage rates have limited room to fall, and the opportunity cost of holding low-yield property rises relative to risk-free bonds.

The Yield Arithmetic That Does the Heavy Lifting

His example is a useful way to separate fact from judgment. The CCL data, the 3.5% average rental yield and the breakeven levels are consistent with the figures he cites. The judgment call is whether yields must rise to 5% to lure buyers back — and if they must, whether that happens through higher rents or lower prices. Lui dismisses further strong rental growth because the economy is slowing and household purchasing power is under pressure, leaving price declines as the adjustment mechanism.

On that logic, a 20% decline would lift an average 3.5% yield to roughly 4.4% — better but still below Lui's 5% threshold. That is why he frames a 20% drop as merely 'optimistic' relative to the roughly 30% move his own math implies for a full repricing against Treasuries.

What Would Undermine the Bearish Case

The forecast depends on three assumptions, all of which could shift. First, the Fed holds rates or hikes rather than cutting through 2027. Second, Hong Kong rents stagnate. Third, no policy intervention emerges to support transaction volumes. If any of these move, the levels that matter change with them. For now, the market's most visible signposts remain the 10-year Treasury yield and the next Fed decision, with Lui's 150 and 130 CCL targets as the checkpoints that would validate or invalidate his call.

What Hong Kong Property Investors Should Watch Over the Next 18 Months

For investors exposed to Hong Kong residential property, Lui's column is a reminder to stress-test a purchase against current numbers rather than past price appreciation. Specific signals align with the article's facts:

• Track the 10-year US Treasury yield against the 4.749% level cited in the column; if it moves toward 5%, the hurdle for buy-to-let returns rises further.
• Compare any property's gross yield with the roughly 4% breakeven cost on a typical 70% loan-to-value purchase; at a 3.5% average yield, the case for waiting is stronger.
• Treat the CCL points in Lui's column — 150 by end-2026 and 130 by end-2027 — as testable triggers for the correction he describes, and reassess exposure if prices approach them.
• For buyers negotiating now, factor in the possibility of a 20% price decline when setting offer prices, rather than anchoring to the 15% full-year appreciation forecasts from Centaline and Midland.

The column is an opinion, not a market signal, but the rate and yield data underlying it are public and can be rechecked at the next FOMC meeting.