Bad news for Hong Kong landlords as Covid-19 pressures housing rents to multi-month lows

Name: Hong Kong imposes toughest social-distancing rules yet as Covid-19 caseload hits another record high
Uploaded: 2022-02-14T23:30:21.000Z
Duration: 4 min 4 s
Description: Hong Kong imposes toughest social-distancing rules yet as Covid-19 caseload hits another record high

Housing rents have slipped in recent months in indices tracked by Midland Realty and Centaline Property Agency as the fifth wave of Covid-19 worsens

South Horizons, Smithfield Terrace and Shatin Centre are among the worst hit in rentals, while supply from new projects is set to weaken the market

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Hong Kong’s city skyline. Rents are getting cheaper, turning early optimism for 2022 upside down as Covid-19 worsens. Photo: Sun Yeung

Lam Ka-sing

Published: 7:30am, 15 Feb 2022

No border reopening just yet and no significant turnaround in the local economy as hoped for to spur the property market. Instead, the current wave of Covid-19 in Hong Kong has squashed early optimism, with housing rents in the city falling to multi-month lows.

Average rent in the city fell 0.7 per cent to HK$34.74 per square foot in January, the lowest level since May 2021, according to data compiled by Midland Realty, based on leases in 138 housing estates. Rents have weakened by a cumulative 2.3 per cent in a four-month slide, the longest since a six-month streak ended in February 2021.

The city logged more than 6,500 cases last week in a flare-up over the Lunar New Year holiday, with officials contemplating potential “rolling district lockdowns” to contain the current fifth wave of outbreak. The outcome has made recent forecasts for a market recovery too bullish, as health experts predicted daily cases to swell to 28,000 by June.

“We have also seen many listings, so the rents will still be under pressure in February and March,” said Sammy Po, who oversees the residential markets in Hong Kong and Macau at Midland Realty. “There may be some bargain rental listings now.”

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Hong Kong imposes toughest social-distancing rules yet as Covid-19 caseload hits another record high

The latest outbreaks could not have come at a worse time as Financial Secretary Paul Chan Mo-po gets ready to deliver his final budget and views on the local economy on February 23. The government will cap public and private gatherings from February 24, while shopping malls and supermarkets will only serve vaccinated customers.