Luxury home rentals fall amid fewer expat hires
Leasing of luxury homes in Hong Kong continues to decline due to fewer hires of expatriate staff in the banking and finance sector.
However, rental demand in the mass market has strengthened, property agents say.
The slowdown in global economic growth due to Europe's sovereign debt crisis has affected Hong Kong, as cuts to corporate budgets have led to a fall in rental demand for high-end flats.
Global property consultant Jones Lang LaSalle said rents for luxury residential properties had declined by 7.5 per cent in the first half of this year.
'The limited inflow of expatriates is expected to lead to subdued activity in the leasing market and put further pressure on luxury residential rents,' said Joseph Tsang, managing director of Jones Lang LaSalle Hong Kong.
But leasing transactions in the luxury market rose moderately towards the end of the second quarter as the market approached peak season, said property consultancy CBRE, noting that vacancy rates dipped to 1.2 per cent.
CBRE said some landlords were more prepared to lower their asking rents during lease negotiations and that this might have bolstered rental transactions.
But after a year-on-year rise of 3 per cent in the first quarter, average rents fell by 8 per cent in the second quarter from a year ago - equivalent to the largest year-on-year decline since the last quarter of 2009. Nevertheless, rental demand for mid-priced luxury homes stayed solid, said Jones Lang Lasalle.
Ricacorp Properties said rental demand for mass-market flats remained solid. Homebuyers' decision to delay purchases amid weaker external economic conditions and an uncertain political environment shored up rental demand, it said.
A survey conducted by Ricacorp showed that average monthly rents in 50 housing estates it monitors was at HK$23 per sq ft last month.