Residential rents in Hong Kong have edged lower in the last three months and the decline is expected to continue, according to estate agents. Latest research by Centaline Property Agency, which tracks newly signed leasing contracts at 85 large private housing estates, revealed that average monthly rents decreased by 0.4 per cent from May to HK$22.40 per square foot of gross floor area in June - the lowest level seen in the past seven months. This also represented a 2.2 per cent drop in rents since April, the research found. "The results show that the property market slowed in the second quarter, with home prices fluctuating and sales' volumes falling," Centaline's senior associate director of research, Wong Leung-sing, said. "Many owners chose to lease instead of sell their properties, hence boosting supply and pushing down rental prices." Although the summer holiday is the peak season for the leasing market, reports of the planned retreat by the United States from its stimulus measures affected sentiment in the local housing sector, said Wong. "Players have weaker confidence in the outlook of the market and we believe rents will follow home price fluctuations and edge downward in the third quarter," Wong said. The average monthly rent in the first six months of the year was HK$22.40 per sq ft, down 1.3 per cent from HK$22.70 at the end of last year. Rents at Kornhill recorded the steepest fall, 6.1 per cent, in the first half of the year, followed by Mei Foo Sun Chuen, where they fell 4.3 per cent. Estate agency Ricacorp Properties said the decline in secondary home sales and the completion of new residential estates had seen a jump in the supply of rental flats, which had dragged down rents. Ricacorp, which monitors rents at 50 private housing estates in Hong Kong, said rents edged down to an average of HK$25.31 per sq ft in June, the third monthly decline and down by 0.2 per cent to HK$25.36 in May. The head of research at the agency, Patrick Chow Moon-kit, said the supply of rental flats would continue to rise in the short term and the stock would be cleared after September at the earliest. Rents were therefore expected to continue declining over the next two months.