Rents in Hong Kong are poised to increase further as soaring house prices deter would-be buyers and push them into the rental sector, according to property analysts. The average price of a lived-in property hit a new high this month, according to a closely watched index. The price gauge of second-hand homes compiled by Centaline Property Agency soared to a record of 191.34 in the first week of August, surpassing the previous high from June 2019, just before Hong Kong’s street protests began to wreak havoc on the city’s economy. As a result, some prospective buyers are electing to rent while they wait in the hopes that the market will eventually cool down. “People may [suddenly realise] they are not able to afford to enter the market, so their only option is to rent,” said Derek Chan, head of research at Ricacorp Properties. Rents are likely to be boosted further still by an increase in mainland Chinese students looking for accommodation when university lectures resume next month, he said. Home rents will increase 15 per cent in the whole of this year as the economy rebounds from Covid-19, and amid the expected influx of students, according to Centaline. The city’s rental index rose for four straight months to June, according to the latest data from the Rating and Valuation Department. Analysts’ predictions for rent increases this year have ranged from 5 per cent to 15 per cent. Louis Chan, Asia-Pacific vice-chairman and chief executive of Centaline’s residential division, forecast a rental increase of 4 to 5 per cent between January and August, and estimated there would be a further 10 per cent rise to come before the end of the year. “Not everyone can accept the fluctuation of home prices,” he said. In the first seven months of 2021, compared with the same period last year, the number of residential leasing transactions facilitated by Midland Realty rose by about a third in Tseung Kwan O, which is adjacent to the Hong Kong University of Science and Technology. “There were limited new expatriate arrivals in [the first six months of 2021],” wrote Nelson Wong, head of research at JLL in Greater China. The expected increase in residential rents comes even amid record-low interest rates that have made mortgage repayments far more affordable for first-time buyers. The one-month Hong Kong interbank offered interest rate (Hibor), at 0.064 per cent on Monday, is at its lowest since January 2010, according to data provided by the Hong Kong Association of Banks. Monthly mortgage payments are “significantly” lower than monthly rental payments, said Ivy Wong, managing director of Centaline Mortgage Broker. “But this may not be enough to lure buyers into the market as many people will be looking at price levels and interest rates from a long-term perspective,” she said.