Hong Kong property: residents face difficult decision whether to rent or buy this year
- Some analysts feel it is the right time to buy as the market is close to bottom, and the 20 per cent decline in prices from an all-time high offsets higher mortgage rates
- While rents in some areas of the city have risen, they have declined in places like Sai Ying Pun and Sheung Wan by as much as 15 to 20 per cent, Habitat’s Allan says
To rent or to buy? Hongkongers will wrestle with these two choices as they weigh the pros and cons of either leasing or buying a home this year, according to analysts.
On the one hand, the decision to rent is supported by elevated interest rates because they make mortgages expensive. On the other hand, higher mortgage rates have pushed developers to price new home launches attractively to reduce their growing inventory.
On the rent side, Allan said it’s a mixed bag, adding that rents in some areas in the south of Hong Kong Island were strengthening for units with good kitchens and bathrooms.
At the same time, rents have declined in areas like Sai Ying Pun and Sheung Wan by as much as 15 to 20 per cent “as we have not seen a strong return of young expat bankers willing to spend on rentals”, she added.