Rental charges at Hong Kong’s ultra-luxury abodes fall by 30 per cent as expatriates and mainland Chinese renters stay away
- Three-storey town houses of around 3,000 square feet (279 square metres) at the South District and on The Peak are now available for between HK$150,000 and HK$200,000 per month, up to 30 per cent less than what they were three to four months ago, agents said
- Other agents have noted declines of between 5 per cent and up to 7 per cent in rental charges
Hong Kong’s monthly leases for ultra luxury residences have fallen by almost a third, as three successive months of street protests and the ongoing drought of high-paying financial jobs have deterred expatriate and mainland Chinese renters.
Three-storey town houses of around 3,000 square feet (279 square metres) at the South District and on The Peak are now available for between HK$150,000 and HK$200,000 (US$25,000) per month, up to 30 per cent less than what they were going for three or four months ago, according to Louis Wong, senior director at Landscope Christie’s International Real Estate.
“Besides expatriates, mainland Chinese renters are also hesitating to move to Hong Kong, and those living in Hong Kong are also considering whether to continue living here,” he said. “Some who were looking for places have also stopped.”
Fitch Ratings last week cut Hong Kong’s rating by one notch to AA from AA+ in the first downgrade of the city’s creditworthiness since China regained sovereignty over Asia’s financial hub in 1997. The rating agency cut the outlook for the city to “negative” from “stable”, citing ongoing events that had inflicted long-lasting damage to international perceptions of the quality and effectiveness of Hong Kong’s governance system and rule of law, and called into question the stability and dynamism of its business environment.
“Within the past few weeks, there have been more cases of renters of [luxury homes] requesting lower rents, and in some cases the landlord has been willing to negotiate as they would like to keep their customers,” said Wong. “Some properties had been on the market for more than half a year without any tenants. That’s why some landlords are lowering their prices.”
“If this market sentiment continues, some landlords will have to reduce their rental expectation,” said Savills Hong Kong’s senior director of residential services Edina Wong. “The effect of the protests will be more apparent in the last quarter of this year.”
Some companies are delaying their expansion plans in Hong Kong, Wong said. Nissan Motor’s Infiniti premium brand is relocating its global head office to Yokohoma in Japan, from Hong Kong.
Applications for general employment visas dropped 7 per cent in August from a year earlier, after rising on an annual basis for most of 2019, according to official figures.
The number of residents who recently spent between one and three months in the city fell 4.1 per cent in the first half, the biggest decline in a decade.
“Individual owners rather than the big corporate landlords are probably being a little bit more negotiable than they normally would,” said Victoria Allan, managing director of Habitat Property, adding that some rents have fallen by up to 7 per cent. “They might be a little bit more concerned or want their property leased out faster, and will be a bit more conducive to negotiating to just rent it out, compared to three months ago.”
With additional reporting by Cheryl Arcibal
