Bad news for Hong Kong tenants as rents predicted to chart record-high in coming months

Improving economic outlook and potential return of mainland Chinese students and job-market entrants could spur leasing demand

The Merton in Kennedy Town registered a 15.4 per cent jump in August, the most among 133 private housing estates compiled by Centaline

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The Merton in Kennedy Town registered a 15.4 per cent increase in rents in August, the biggest gain among 133 housing estates tracked by Centaline. Photo: Handout

Published: 8:30am, 5 Oct 2021Updated: 7:01pm, 5 Oct 2021

Housing rents in Hong Kong are expected to recoup all the losses caused by the social unrest and the Covid-19 pandemic, with analysts predicting a record in the coming months as the economic outlook brightens.

Rents climbed for a sixth month in August for a cumulative gain of 4.7 per cent to 182.2, according to an index published by the Rating and Valuation Department. The index reached an all-time high of 200.1 in August 2019 before crashing in the subsequent nine months amid anti-government protests.

Hong Kong’s economy grew 7.5 per cent in the second quarter from a year earlier, and official reports since June showed retail sales jumped in July and August while the outlook for exports has improved over the past five quarters. The government is working to reopen the border with mainland China, although this may take more than four to five months, a government health adviser said.

“As the economy recovers, unemployment [rate] falls, rents are expected to rise,” said Sammy Po, chief executive of Midland Realty’s residential department. He expects the record to be broken over the next six to 12 months. “What’s more, if the border really reopens [further], even more mainlanders will come.”

A general view of the West Kowloon residential area on September 24, 2021. Photo: Martin Chan

The border reopening could pave the way for the return of mainland Chinese students and new job-market entrants to Hong Kong, fanning demand for housing near universities, according to Ricacorp Properties. Recent sales by homeowners have also displaced their tenants, pushing them into the market, it added.