Hong Kong property: why the end of quarantine will not end the pressure on rentals market, with resident departures still a concern
- End of quarantine will help city get back to normal but analysts say the move may only provide limited support for struggling rental market
- The city’s property sector has to contend with a slowing economy, a stock market fall, rising inflation, higher interest rates and resident departures
Investment professional Eva Wu, a British national, has terminated her rental contract in Hong Kong ahead of flying back to the UK in December for a long holiday.
The small flat, located at Mountain View Mansion in the busy Wan Chai area, measures 283 sq ft and has a rent of HK$11,000 (US$1,401) a month. Wu will rent another flat on her return in February, and given the recent downward trend in rents as more expats leave the city for good after years of strict Covid-19 restrictions, she is hoping for a better deal.
“There has really been quite an impact [on rents]. Many people made a decision at the beginning of the year to leave, heading off to places like Singapore,” said Wu. “However, there may be fewer [leaving] now after the need for hotel quarantine was axed.”
From September 26, overseas travellers will no longer be confined to hotel rooms for quarantine upon arrival after Hong Kong finally ended some of the world’s toughest travel restrictions, in a step aimed at reconnecting the isolated financial centre with the world.
While the change will help the bustling city get back to normal, analysts say the move may only provide limited support for Hong Kong’s struggling rental market, which may not fully recover until all restrictions are lifted and the mainland border reopened.
Hong Kong’s rents are currently expected to fall 5 to 10 per cent by the year-end, according to analysts, after years of breakneck growth before the pandemic hit.