• Thu
  • Dec 18, 2014
  • Updated: 5:25am
PropertyHong Kong & China
RENTS

Hong Kong home rents rise at quickest pace in 23 months

PUBLISHED : Tuesday, 26 August, 2014, 11:43am
UPDATED : Wednesday, 27 August, 2014, 4:55am

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.

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This article is now closed to comments

sammckhk
Another mess created by Donald Tsang when he revised the tenancy legislation in the mid 2000's, removing the maximum rent increase limit and destroying the very limited rights that existed.
538eaa69-8078-43ce-a47c-34f30a320969
That's all the more we should vouch for the bureaucrats agenda to build more bridges and tunnels to link with the motherland so more investors and influx of money from tourists will continue to flood our city. Isn't this what the money mongering politicians are playing all along? The game of survival of the fittest? Now we reap what they have sown.
robkemp
You can rent out at a level someone is willing to pay, otherwise your return is zero.
Spent half my salary on a single room in London back in the 1990's. Same problem in all the major international cities.
chuchu59
The writing is on he wall. Those with vested interests(some even at Legco) continuously request the CY administration to scale down the already not so-tough housing measures. I urge the administration to introduce even tougher measures for a sustained period. As long as we don't have Greg SO in charge of the housing portfolio and who is likely to say that property agents have to make a living too we might hope to see a slight drop in housing prices and rentals.
virokick
The ultimate catalyst for a social revolution or breakdown.
Politicians, LEGCO, Occupy Central Supporters or opposers can't solve this issue ; therefore the issue will solve itself in the ugliest way.
History has never been proved wrong ; that the majority who are squeezed will always revolt without fail.
walkup
I see the anti-property brigade are choking on their cornflakes again. Angry no doubt that the property crash they predicted as 'inevitable' hasn't played out according to the script. Missed the boat and steaming away. Welcome back! We missed you.
gunzy
60% of families own their own home, hard to say that the remainder is a majority.
dynamco
bring back the Landlord Tenant Ordinance protection for residential property
wait for China to bring in worldwide taxation and reporting under G20
then see the rats scuttle the property bubble here as they bolt
jmnicholson
removing the discrimatory stamp duties along with building lower cost apartments would be more helpful.
virokick
It's closer to 50%. Other home owners are basically investors or ghost owners parking their money. Regardless you agree with me on this figures; out of the 50% or 60% of home owners in HK -many are waiting for an upgrade. ( much needed).
The average home size in HK is a 600sqft( gross) , net will be a pathetic 500sqft.
I'm surprised there hasn't yet been a revolt this far. Many men here are just too content and docile enough to go back to their pigeon home playing with their tiny electronic gadgets.
For the others who are on a 25 years mortgage slaving for banks and developers ,I suppose they should rejoice in gratitude- this is our sickness. Because we in HK ,in exchange for 600sqft of comfort, stability and content, therefore this has brought the reality upon ourselves.
I've no problems if prices rise further from here, as long as there is enough built for those who genuinely need affordable housing ; the poor , elderly , families with children etc.

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