Hong Kong’s recession-hit economy weighs on rents for a fourth consecutive month in November, set to fall further

Average rent in the city fell 1.6 per cent year on year in November to HK$36 (US$4.6) per square foot – the lowest since May, according to Centaline Property Agency

Combined drop in rents between August and November stood at 5 per cent

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Rents in Hong Kong fell for a fourth consecutive month in November. Photo: Nora Tam

Published: 8:00am, 12 Dec 2019Updated: 8:27am, 12 Dec 2019

Rents for residential property in Hong Kong will continue to decline over the next few months as a weakening economy raises concerns over employment, market observers said.

The average rent fell 1.6 per cent last month from a year earlier to HK$36 (US$4.6) per square foot – the lowest since May, according to data from Centaline Property Agency on Wednesday.

Between August and November, rents fell by 5 per cent as the anti-government protests escalated and the city’s economy entered a technical recession, said Wong Leung-sing, senior research director at Centaline.

“People don’t want to pay too much on rent,” said Wong, adding that people were looking to cut down on their rental expenses by moving into cheaper neighbourhoods or smaller flats.

On Monday, the Hong Kong Retail Management Association warned the struggling retail sector could see at least 5,600 job losses and 7,000 company closures in the coming six months.

Wong said that rents would fall by another 1.1 per cent to HK$35.6 per sq ft next month as “winter is always a low season for the property leasing market”. He also added that he does not expect Hong Kong’s economy to recover until February.