Hong Kong home rents fall for first time in a year as completions rise

Home rents in Hong Kong fell for the first time in 12 months in March, with analysts predicting tenants could seek further reductions as private housing completions rise this year.

However, views are mixed on whether the fall in rents is a prelude to a home price correction, with that more likely to depend on when interest rates start to climb.

Secondary home rents at 100 housing estates tracked by Centaline Property Agency averaged HK$32.80 per square foot in terms of saleable area last month, down 0.6 per cent on the record high of HK$33 per sq ft seen in the previous three months.

"This is the first fall since March 2014," said Wong Leung-sing, an associate director of research at Centaline Property Agency, adding that it was fuelled by an increase in new home completions.

Property projects already completed and those to be ready for occupation this year include Park Signature (1,620 units) in Yuen Long, City Point (1,717 units) in Tsuen Wan, Mont Vert (1,071 units) in Tai Po and The Austin (576 units) in Kowloon.

In a separate survey of 50 housing estates tracked by another property agent, Ricacorp Properties, average home rents rose 0.4 per cent to HK$32.17 per sq ft, but the agent expected rents would decline this month.

"The property market this year may see surplus supply for the first time in three years," said Alfred Lau, an analyst at Bocom International. "We expect rents to remain flat or decline by up to 5 per cent this year."