Hong Kong, mainland China urged to avoid overlooking property market transparency

HONG KONG, 28 SEPTEMBER 2026 —

Hong Kong and China’s Property Markets Defy Transparency Rules as Domestic Investors Drive Liquidity

The findings underscore how domestic investor dominance and market scale can override the need for full transparency, even as institutional and retail investors increasingly demand better data to navigate emerging asset classes.

The index, which evaluates 88 countries and 146 cities on legal frameworks, data availability, and operational efficiency, found that the most transparent markets—including the UK, Australia, and Japan—experienced the strongest commercial property investment growth. Yet in Hong Kong, where transaction volumes hit just US$4 billion in the first half of 2026—the lowest among Asia-Pacific leaders except India—transparency alone has not translated into higher liquidity.

Even at its 2018 peak, Hong Kong’s annual volumes matched South Korea’s, a market ranked 24th in transparency. Meanwhile, mainland China, despite its 31st-place ranking, remained the region’s most active market in the first half of 2026, surpassing Japan, according to MSCI data.

The disconnect stems from the dominance of domestic investors, who account for nearly two-thirds of transaction volumes in China, even during peak cross-border activity in 2019 when foreign investment reached US$19.8 billion, per MSCI. In Hong Kong, local investors controlled three-quarters of investment activity in 2018, while concentrated ownership by well-capitalised landlords—who hold trophy assets for extended periods—has further constrained liquidity.

A CBRE survey from January 2026 confirmed that transparency was not among the top concerns for regional investors, with high construction costs, geopolitical risks, and tighter monetary policy instead topping the list of challenges.

Yet transparency is not irrelevant. Matthew McAuley, senior director of market intelligence at JLL, noted that while domestic investors may not prioritise data accessibility, the growing institutionalisation of commercial property—particularly in niche sectors like student accommodation—demands higher-quality information. In Hong Kong, where student housing relies heavily on converted assets, detailed operational and capital expenditure data is critical for institutional investors assessing risk.

Similarly, mainland China’s Reit market, now valued at US$32 billion with nearly 80 listed vehicles, has expanded rapidly since its infancy five years ago, becoming the third-largest in Asia-Pacific. The rise of publicly traded Reits is gradually improving transparency, but the market’s scale remains its primary driver of liquidity.

The Asia-Pacific region’s commercial property investment landscape remains overwhelmingly domestic, with cross-border transactions accounting for just 25-30% of total volumes over the past decade, compared to Europe’s frequent cross-border dominance since 2015. While pricing, supply-demand dynamics, and economic conditions play larger roles in short-term investment decisions, McAuley warned that transparency acts as a structural force over time.

As institutional capital flows into alternative property sectors and retail investors seek listed real estate exposure, the demand for comparable, high-quality data will intensify. For Hong Kong and China, where domestic investors currently dictate market behaviour, the question is not whether transparency matters—but how long it will take for global capital to demand it.

Related: Matthew McAuley