Bad news never arrives alone. Home-seekers finding it difficult to get on the property ladder as prices of entry-level flats hit record highs are now seeing rents soar to previously unseen levels.
"It is sad that entry-level families will continue to struggle to cope as the cost of living pressures bites," said Simon Lo Wing-fai, an executive director at Colliers International's research and advisory division.
Home prices and rents have both increased over the past few months, and Lo said they were unlikely to drop, even though the growth pace was expected to slow.
The Centa-City Leading Index, created by Centaline Property Agency to monitor prices in the secondary market, hit 125.66 on August 16, surpassing the record of 124 set the week before. Before that, the peak was 123.66, set in March last year. Although the index dipped to 125.31 last Friday, prices on Hong Kong Island set a record with a week-on-week rise of 0.22 per cent.
Centaline said rents at 100 large estates averaged HK$23.80 per square foot last month, up 2.6 per cent month on month from June, the fastest growth rate in 23 months.
The biggest rise was seen in Sceneway Garden in Lam Tin, with rents 5.7 per cent higher on the month at HK$24.30 per square foot.
Patrick Chow Moon-kit, the head of research at Ricacorp Properties, said the increase was mainly in small units with one to two bedrooms.
Demand was strong but supply had fallen because some landlords preferred to put their units up for sale in the wake of rising prices, Chow said.
The latest report by the property agency said average rents at 50 housing estates stood at HK$26.37 per square foot last month, the highest ever.
According to the Rating and Valuation Department, mass market homes saw a 1 per cent gain in rents in the year's first half.
"City One Shatin saw rents rising from HK$12,000 to HK$15,000 per month over the past three months," Chow said.
Meanwhile, summer was the peak season for renting as many Hong Kong and mainland students were looking for units, he said.
Both Lo and Chow expect the pace of price and rent rises to slow next month. More primary projects would then be ready for occupation, Chow said, which would increase supply in the rental market.