Luxury rental market set to soften further in second half
Experts say demand from expatriates is weak because housing allowances have been cut amid instability in global financial and equity markets
Rentals in Hong Kong's luxury housing sector are falling, and will keep dropping in the second half of the year due to various bearish factors, analysts say.
"The luxury housing rental market started to soften in April and May. Demand is weak during this year's traditional high season for leasing to expatriates, which started in May," said Koh Keng-shing, founder of property consultancy Landscope Christie's International Real Estate.
"There's been a sudden increase in leasing stock, but there's no commensurate increase in demand from finance professionals.
"This is due to reductions in their housing budgets as many financial institutions downsize their operations amid instability in the global financial and equity markets."
As a result of these bearish conditions, rentals in the past two months had dropped 5 to 10 per cent, mainly in the south side of Hong Kong Island and at The Peak, he said.
"Between now and the end of this year, I expect another 10 to 15 per cent drop in rentals as owners of luxury flats get more aggressive in reducing their asking price after the peak leasing season this month,"Koh said.