To rent or to buy? Cereal Luk, like so many other tenants in Hong Kong, is currently wrestling with this tricky question.
While she is keen to avoid paying rapidly rising rents, buying now seems fraught with risk, since average home prices are approaching the peak levels reached before the 1997 East Asian crisis and luxury-home prices have exceeded those levels.
'I am trapped in a dilemma,' confessed Luk, who works in finance and is renting a two-bedroom flat in North Point for about HK$8,000 a month. She expects to have to pay more when her tenancy expires in the first quarter of next year.
A survey by estate agency Midland Realty of rental renewals at 100 housing estates that it monitors showed that average home rents rose to HK$19.80 per square foot per month last month, up 38.46 per cent from HK$14.30 per square foot in March 2009, and up 8.8 per cent compared with March of last year.
A study by Centaline Property confirms the trend of rising rents is continuing. In the first quarter, it found, flats renting for between HK$5,000 and HK$10,000 a month accounted for 31.5 per cent of the market, down from 32.2 per cent in the fourth quarter of last year.
Flats renting for below HK$5,000 accounted for 0.6 per cent, down from 1 per cent in the fourth quarter of last year.
