Rents have also been softening in popular housing estates such as Taikoo Shing. Photo: Felix Wong

Pressure drop: Hong Kong home rents see biggest month-on-month decline in four years

October's 1.8pc decline is biggest in four years and follows September peak of HK$34 per sq ft

Hong Kong’s home rents fell 1.8 per cent month on month in October, the biggest monthly decline in four years, a private study shows.

Analysts say the falling trend may intensify as a large number of private housing units will be delivered to the primary market soon.

Average home rents at 100 housing estates stood at HK$33.40 per square foot a month, against September’s peak of HK$34, according to a study by Centaline Property Agency, one of the city’s major property agents. The October figure was the lowest in four months.

“It is the biggest monthly decline in four years,” said Wong Leung-sing, head of research at Centaline Property Agency, citing an increase in supply as a reason.

The worst performer was City One Sha Tin, where average rents fell of 4.5 per cent month on month to HK$36.20 per square foot. It was followed by Sceneway Garden in Lam Tin, which posted a fall of 3.4 per cent to HK$31.60, and Mei Foo Sun Chuen, which was down 2.8 per cent.

Rents have also been softening in popular housing estates such as Taikoo Shing.

“The average rent once hit more than HK$42 per square foot when the market peaked in the second quarter, now it’s down to the HK$39.60 level,” said Kenneth Chiu, sales manager at Centaline’s Taikoo Shing branch.

There had been 57 leasing deals clinched in Taikoo Shing so far this month, up from 54 in the whole of last month.

“Units with two bedrooms, with a size of 675 sq ft, are the most popular units at the estate,” Chiu said. “The average rent a few months ago was HK$26,000 a month. Now you can rent one at between HK$23,000 and HK$24,000 .”

Alfred Lau, a property analyst at Bocom International said “the trend will continue and the pace of decline will even speed up”.

“The delay in property delivery has shifted the rental pressure to the next coming months,” he said, citing projects including Grand Austin (691 units) at Austin Station, The Avenue II (1,096 units) in Wan Chai and Mayfair by the Sea I&II in Tai Po (1,091 units).

He estimated a total 14,000 units to 15,000 private housing units would be delivered this year, and more than 30,000 units if government housing was included, making it the first time since 2011 that the number of new units would exceed household formation. The new completions would pull rents down by 10 per cent, he said.

Derek Chan, head of research at property agent Ricacorp Properties, agreed the falling trend would continue.

In the study by Ricacorp Properties, average rents at 50 housing estates last month fell 2 per cent from their peaks in August to HK$32.88 per square foot.

Meanwhile, MTR Corp said it had received 19 expressions of interest submissions for the upcoming tender of the ninth phase of its Lohas Park development in Tseung Kwan O. It will consist of 1,780 units in three towers, with a total area of 1.12 million sq ft. Parties to register their interest included heavyweights such as Cheung Kong Property (Holdings), China Vanke , Sun Hung Kai Properties , Sino Land, New World Development and Wheelock Properties.