Residential tenants in Hong Kong were hit by a steady rise in rents last year, but the worst may be yet to come, property agents warn.
Rents will rise at a faster pace in the second half of this year as demand for rental accommodation increases as a result of homebuyers hold off on making purchases while they digest the impact of the latest round of measures aimed at curbing property speculation, agents say.
"On the other hand, fewer investors will buy to let," said Wong Leung-sing, head of research at Centaline Property Agency.
Last Friday the government declared a doubling of stamp duties for homes and non-residential properties valued at more than HK$2 million.
The measures came just four months after the roll-out of additional stamp duties of 15 per cent of the purchase price to cool demand from foreigners and companies.
Last year rents in 85 housing estates rose for 11 straight months to HK$22.8 per sq ft a month, according to Centaline Property Agency.
Wong said rents of mass housing estates would rise even faster in the second half of this year due to the growing imbalance between demand and supply. He forecast rents in such estates would rise by 18 per cent this year.
Homeowners who sold their flats in the past two months will see their deals completed in the coming months.
"If some do not return to the market to buy again because of the increased stamp duty, they will need to rent," Wong said.
"We are receiving more inquiries from locals looking for flats that are offered for rent in a range of between HK$30,000 and HK$50,000 a month," said Edina Wong, senior director of residential leasing at Savills.
She said these locals had considered buying but were now waiting for the market outlook to become clearer.
Victor Lam, who has been renting a 1,000 sq ft flat at Villa Esplanada in Tsing Yi, said he had come under pressure from rising rents as the landlord raised his rent by more than 15 per cent from HK$19,500 a month to HK$22,500 in November. "The owner is very aggressive in asking for higher rents," Lam said.
Some expatriates who were planning to buy but are now intending to lease, have been hit by a "double-whammy".
Jason Liang, a young expatriate public relations professional, said he had planned to buy a flat in City One Shatin with a budget of about HK$3 million.
But he aborted the plan after the new stamp duty was introduced, and was subsequently hit by a demand for a higher rent from the flat owner.
Liang, a Guangzhou native, was renting a room in Sheung Wan for HK$3,000 a month. But in November the owner raised his rent by more than 10 per cent to HK$3,400.
However, Liang was philosophical about that. "Even at that rent the yield for the owner remains low and I believe he will raise rents further when the contract comes up for renewal again," he said.Topics: Rents Residential property Home sales Hong Kong stamp duty Hong Kong Property