Mass housing rents up over 20pc in a year

PUBLISHED : Thursday, 24 June, 2010, 12:00am
UPDATED : Thursday, 24 June, 2010, 12:00am

Rents in mass residential housing in Hong Kong have surged more than 20 per cent in the past year and the trend is likely to continue, according to property agents.

Monthly rents at 100 selected housing estates averaged HK$18.40 per square foot in May, according to data compiled by Midland Realty.

That was a 22 per cent increase on the same month last year. It was also 5.9 per cent higher than December's average of HK$17.32 per square foot.

The biggest growth was seen in Kingswood Villas in Tin Shui Wai, in the New Territories, where rents were up 36.8 per cent against May last year.

Next was Heng Fa Chuen, on Hong Kong Island, where rents rose 35.2 per cent.

Research by another leading agent, Centaline Property Agency, turned up much the same results, with the monthly rents at 73 housing estates last month averaging HK$17.40 per square foot - a 5.5 per cent increase compared with December's HK$16.50 per sq ft.

Residential rents have risen for 14 consecutive months, showing cumulative growth of 31.8 per cent, Centaline Property research head Wong Leung-sing said.

'If mass housing rents go up another 17.2 per cent, it will be back to the record high of HK$20.40 per square foot achieved in September 1997,' said Leung, who believes that figure could be reached in the next two years.

Midland Realty chief analyst Buggle Lau Ka-fai also expected to see a rise in residential rents given the growing demand but falling supply.

Meanwhile, the housing market has become more active since the government sold a residential site in Ho Man Tin for a higher-than-expected HK$10.9 billion at public auction this month.

According to data compiled by Ricacorp Properties, there were 713 preliminary sale and purchase agreements signed from June 14 to 20 - a 38 per cent rise week on week.

Flat owners usually prefer to offer their properties for sale rather than for lease in a strong sales market, leading to a decline in supply.

'However, summer is always the peak season for the residential leasing market, when demand will increase. We see rentals continuing to rise,' Midland Realty's Lau said.