Rents up 11.5pc, far outstripping pay rises

PUBLISHED : Friday, 11 February, 2011, 12:00am
UPDATED : Friday, 11 February, 2011, 12:00am

Hong Kong's overall residential rents were 11.5 per cent higher last month than in February last year.

Property agents said the jump was driven by strong demand as the economy continued to improve.

The rent rise outpaced average salary growth, which was 2.4 per cent higher in September over the same month last year.

Figures from Midland Realty, gathered from the rental data of 100 private housing estates across Hong Kong, found rents on average increased from HK$17.40 per sq ft last January to HK$19.50 per sq ft last month.

Midland Realty's chief analyst Buggle Lau Ka-fai believed residential rents could go up a further 11 per cent this year, in line with the estimated increase in property prices.

'Capital will continue to flow into the property market as people try to hedge against inflation. It will help boost the leasing business,' he said.

Rents at Galaxia in Diamond Hill rose 2.9 per cent last month to HK$21.60 per sq ft, the largest percentage rise among the 100 estates. Centaline Property Agency said flat rents rose 42.4 per cent from April 2009 to last December.

Meanwhile, lawmakers criticised the government for a lack of progress with a probe into a remark by Cheung Kong (Holdings) real estate executive director William Kwok Tsz-wai.

Kwok posted comments on his miniblog in November urging buyers to be quick to speculate in flats in one of its developments in Sha Tin that he said was not affected by measures to cool the property market.

Lawmakers Lee Wing-tat, James To Kun-sun and Leung Kwok-hung questioned whether officials were afraid of talking to Cheung Kong and called on the government to talk to the developer.

Permanent Secretary for Transport and Housing Duncan Pescod did not respond to the request but said the bureau would 'follow the system'.