The recent recovery in Hong Kong’s residential property market may be losing momentum, according to a new analysis from UBS. While the market has shown signs of improvement, the Swiss investment bank suggests that several structural and economic factors could dampen future growth in both property prices and rental yields.

UBS identifies four primary risks that could impact the sector. First, the bank points to the integration of artificial intelligence as a disruptive force in the local economy. Second, they note that population inflows into the city are slowing down, which could reduce the demand for housing. Third, the deepening economic integration with the Greater Bay Area is expected to change local market dynamics. Finally, a significant volume of new residential supply is expected to hit the market, which typically exerts downward pressure on prices.

While the report highlights these risks, it does not suggest an immediate collapse, but rather a moderation of the current upturn. The outlook remains cautious as the market balances these new supply-side pressures against the existing economic environment.