Rents set to fall in Hong Kong but could rise in Singapore and Taipei, predict forecasters, as expats flee coronavirus
Experts at ECA International predict a Hong Kong rental slump through 2020, but trends suggest Singapore and Taipei could be on the up, while Australia looks sluggish and mainland China remains uncertain
Renters hoping to negotiate cheaper housing in the wake of the coronavirus might be in luck, an industry forecast suggests.
If your landlord is in a position where they need to keep property occupied, or is willing to pass on the savings from lower mortgage interest rates, tenants in many locations across Asia are in a good position to bargain, says Lee Quane, regional director for Asia at ECA International, an HR consultancy.
Each year, ECA International works out housing costs based on the average rental prices for a mid-range, three-bedroom flat in more than 360 locations worldwide. The research is aimed at expatriate executives as the target market. When the latest data was collected last September – but only published on April 1 – it found that Hong Kong remains the world's most expensive location for accommodation in the category, for the third year in a row.
The average monthly rent for an unfurnished flat in desirable areas such as Hong Kong’s Mid-Levels was US$11,318, a 3.45 per cent-rise. But this was less than increases seen in previous years “and there is likely to be significant drops in rent over the coming months”, according to the report.
“In light of the prolonged anti-government protests and coronavirus outbreak currently under way, we expect to see rents fall throughout 2020 as the number of overseas workers in Hong Kong drops significantly, and the usually high demand for housing is tempered,” Quane says.
He also expects the next lot of data to show a trend reversal in Singapore. In the year to September 2019, the average rental in the city state nudged up by 1.4 per cent, to US$4,233 per month, after five consecutive years of decline. Quane attributes this to more overseas relocations to Singapore, especially in the fintech and pharmaceutical sectors, as well as “evidence that expatriate populations were moving from Hong Kong to the relative stability of Singapore”.
However, tighter restrictions on work permits for overseas workers have now counteracted demand somewhat, Quane says, and even though Singapore remains one of the most affordable locations for expatriate housing in Asia – and 25th on global rankings – Quane believes recent rent increases could be reversed as the coronavirus fallout bites.
In other insights from ECA International's data, mainland Chinese cities saw varying rental trends over the past year. While Beijing was fairly static, staying in 19th place globally, other cities saw big rises in the average rent.