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Property

The key policy is the relaxation of the “New Capital Investment Entrant Scheme”. Currently, applicants of the New Capital Investment Entrant Scheme are required to invest at least HKD30mn. Of which, a maximum of HKD10mn could be derived from investment in real estate. For the purchase of residential properties, the transaction price threshold will be lowered from HKD50mn to HKD30mn. This adds flexibility for applicants, especially after strong mainland investor demand following February's stamp duty cancellation, where mainland investors outpaced Hong Kong buyers in 1H2025 across primary and secondary markets. On non-residential properties, the maximum amount of investment for the purchase of non-residential properties to be counted would increase to HKD15mn.

Starting in 2026/27, self-financing non-local student quotas at post-secondary institutions will increase from 40% to 50%, and research postgraduate ceilings will rise from 100% to 120%. Rising student inflows should support rental growth and investment demand. As of June 2025, the rental yield reached 3.50%. The negative rental carry amid lowered mortgage rates is largely neutralized, prompting the return of property investors. This trend will likely extend amid the Fed Funds rate cut cycle.

The Government will accelerate the Northern Metropolis through a new high-level Committee led by the Chief Executive and three working groups. Measures include flexible land surrender, phased land premium payments, and lease modifications based on actual floor area.

Tourism

“Mega-events” remain on the government’s playbook to boost tourism, promoting art, trading, exhibitions, and fashion design events in the coming year. With the enhancement of mainland tourism visit endorsements last year, Mainland tourism increased by 8.0%yoy in the first eight months of 2025. The Leisure and Cultural Services Department (LCSD) will introduce market-based business models into LCSD facilities, including leasing out museums for commercial and private use.

While large-scale events provide incentives for visitors, the US Fed Fund rate downcycle favors Hong Kong retail sales. With an expectation of another 75bps cut by the end of 2026, we currently project USD/CNY to reach 7.00. The weakening HKD will boost retail sales by increasing visitors' purchasing power and discouraging outbound travel for residents, who may also be more inclined to attend local mega-events.

Employment

The government will inject an additional HKD 30bn into work projects over the next 2-3 years, boosting local construction and prioritizing local worker employment. Meanwhile, it will also tighten import criteria for waiters/waitresses and junior cooks, and extend the SME Financing Guarantee Scheme's 80% Guarantee Products application by two years to aid businesses. These are to soothe the stressed construction and consumption-tourism-related job markets. The jobless rate of the respective sectors hit 7.2% and 5.5% respectively, compared to the already rising headline jobless rate of 3.7% as of Jun-Aug

Financial Centre

The government will leverage the Technology Enterprises Channel to help Mainland tech firms raise funds, optimize Main Board listings and structured product regimes, and consider enhancing listing requirements for companies with weighted voting rights. At the end of August, the cumulative amount of funds raised through IPOs exceeded HKD130bn, ranking first globally in IPO fundraising. HKEx will explore shortening the stock settlement cycle to T+1, and encourage overseas and China Concept Stock companies to list or secondary list in Hong Kong.

The government aims to enhance financial infrastructure and explore centralized management and cross-collateralization of assets on one platform, connecting with markets like Switzerland and the UAE, and promoting offshore Chinese Government Bonds as collateral to boost RMB asset use. RMB internationalization remains a key focus.

The authority will expand the RMB trading counter under Stock Connect's Southbound trading. Currently, there are only 24 HKD-RMB dual-counter securities listed, with no further expansion since the programme was launched in June last year. Meanwhile, Hong Kong will facilitate offshore RMB transactions by providing more varied financial products such as A-share derivatives, offshore bonds, and RMB dual counter securities.

Hong Kong will establish a central gold clearing system to facilitate its goal as a Gold Exchange Centre. The city is now targeting to build a reserve of 2,000 tonnes in three years, almost on par with Mainland China's 2,300 tonnes. Global central banks are increasing gold exposure. China's gold reserves reached USD254bn in August, up from USD191bn a year ago. After its establishment, domestic gold exports surged 16.5% year-on-year in volume during the first seven months of this year, after growing 34.2% in 2024. A new gold trading market and storage facilities will boost the related industry, offering diverse gold investment, storage & logistics, trading, and hedging services.

International trade

Hong Kong is expanding trade ties with ASEAN and the Middle East by opening a new ETO in Kuala Lumpur and pursuing investment agreements with Saudi Arabia and Egypt. By August 2025, ASEAN had become Hong Kong’s second-largest export market, and the Middle East overtook Japan with a 3% share. The Government is driving trade digitalisation and launching the Dongguan Logistics Park to cut costs, speed up cargo flows, and attract more regional corporates to use Hong Kong as their trading and investment base.

Innovation

In line with national policies on new quality productive forces, the Hong Kong Government is ramping up support for the AI development sector. It launched the HKD3bn Frontier Technology Research Support Scheme, including HKD1bn for the Hong Kong AI R&D Institute in 2026 to drive AI research, commercialisation, and broader adoption. The Government is also prioritising the low-altitude economy, improving civil aviation laws, updating regulations, and designating spectrum by year-end to build core infrastructure. In education, it will allocate HKD2bn from the Quality Education Fund to advance digital learning in schools.

Conclusion

The Policy Address has shown a proactive follow-up from the foundation set last year. The relaxation of the Capital Investment Entrant Scheme, increasing non-local student quotas, and accelerating the Northern Metropolis will boost property sentiment. Tourism is expected to expand through mega-events and a weaker HKD. Improved financial infrastructure will cement Hong Kong’s status as an international financial centre. Further, tech support, including AI, and expanded international trade will solidify future growth.

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