In recession squeeze, rents are converging for Hong Kong’s micro flats and subdivided lots

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A 131-square foot flat in TPlus residential project in Tuen Mun, Hong Kong was leased out at HK$6,300 per month in February 2020. Photo: Bloomberg

Published: 8:15am, 3 Jun 2020Updated: 6:47pm, 3 Jun 2020

Rents on tiny flats in some of Hong Kong’s chic property developments are sliding towards the rates on the city’s notorious subdivided flats as landlords concede more ground in a recession-hit economy, according to property agents.

At least 10 such projects completed in recent few years have had flats leased out at or below HK$10,000 (US$1,290) a month since the beginning of this year, as rising unemployment and campus closures hurt demand for housing from young professionals and foreign students.

With heavy clouds over the economy, rents have slipped by 10 per cent on average across the broader market since they peaked in August last year, according to data published by the Rating and Valuation Department. The rates for units smaller than 430 square feet declined by 11.8 per cent, more than the 9.2 per cent retreat for units measuring 431 to 752 sq ft.

“Some landlords said their tenants might be laid off and discussed terms with them, including requests for a 10 per cent rent reduction and delaying them by one to two months,” said Jeffrey Lam, chief area director at Hong Kong Property Services (Agency).

Last week, a 167 sq ft flat at One Prestige, a two-year-old development in North Point catering for young people, was rented out for HK$10,000, according to Lam. That represented a 16.7 per cent cut from the landlord’s asking price.

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