Hong Kong home rents fall as owners cancel sale plans amid falling prices

Residential rents are tumbling as a growing number of home owners balk at falling house prices and choose to lease their flats rather than sell.

In the Lohas Park development in Tseung Kwan O, rents dropped by up to 20 per cent last month, taking rates back to the same level as early last year, according to Alvin Ma, a senior district manager at Midland Realty's branch in Tseung Kwan O.

And in the 19 housing estates in the Tseung Kwan O district, 800 flats were being offered for lease this month, compared to 600 last month, according to Crystal Tam, a sales director at Centaline Property's Tseung Kwan O branch.

La Splendeur, the second-phase development of Lohas Park, is expected to be ready for occupation as early as next month, and the increase in rental flats likely to be released onto the market has prompted many owners in previous phases of the project to cut prices in order to lure tenants, Midland Realty's Ma said.

Last week, a three-bedroom, 903 square foot flat on a lower floor of The Capitol, the phase-one development of Lohas Park, was leased for HK$12,000 a month - HK$13.20 per sq ft of gross floor area or HK$17.60 per sq ft of its 680 sq ft saleable area. The rent was about 20 per cent lower than the average monthly rental of HK$15,000.

"In per square foot terms, rents at Lohas Park have been the lowest among the city's housing estates located along the MTR stations," said Ma, who added that the number of flats for lease at Lohas Park had risen to 350, almost half being offered by owners of flats in La Splendeur.