Hong Kong’s luxury home rents fall as expats leave in droves due to Covid curbs, while New York, Toronto and Singapore see gains

Name: Why has Hong Kong been hit so hard by the Covid-19 fifth wave?
Uploaded: 2022-06-28T11:36:21.000Z
Duration: 7 min 29 s
Description: Why has Hong Kong been hit so hard by the Covid-19 fifth wave?

Prime rents in Hong Kong fell 1.1 per cent quarter on quarter in the year’s first three months

Rents for Hong Kong’s high-end homes have slipped 6.8 per cent since the pandemic started in 2020

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Luxury villas and residential buildings on Mount Kellett Road, The Peak. Photo: Roy Issa

Cheryl Arcibal

Published: 7:36pm, 28 Jun 2022Updated: 7:43pm, 28 Jun 2022

Hong Kong’s luxury homes bucked the global market trend, becoming the only high-end housing market in 10 major cities to suffer a drop in rents this year as the city’s economy struggled under stringent Covid-19 curbs, according to Knight Frank.

Prime rents fell 1.1 per cent in the first quarter from the preceding three months, based on a new index compiled by the property consultancy. New York led gains with a 10.6 per cent increase, followed by 3.8 per cent in Toronto and Singapore and 3.6 per cent in London.

Since the pandemic broke out in early 2020, rents for Hong Kong’s high-end homes have slipped 6.8 per cent, compared with declines of 14.7 per cent to 20.1 per cent in New York, London and Toronto, the report showed.

Hong Kong’s economy contracted 4 per cent in the first quarter, with blame falling squarely on the city’s anti-pandemic measures during the fifth wave of infections. While Hongkongers departed the city in large numbers, foreign investors were also thwarted by tough quarantine rules and travel restrictions. The government has since trimmed its growth forecast to 1 to 2 per cent from a range of 2 to 3.5 per cent.

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Why has Hong Kong been hit so hard by the Covid-19 fifth wave?

“Covid restrictions are the main reason for the decline,” said Martin Wong, director, head of research and consultancy for Greater China at Knight Frank, citing border closures among others. “The market will remain subdued for the rest of the year” if those curbs stay as it relies heavily on demand from non-locals, including mainland Chinese, he added.