Rents at popular Hong Kong housing estates falling faster than home sale prices
Concern about the deteriorating economic outlook has more middle-class Hong Kong families looking for cheaper rental deals
Rents at blue-chip housing estates are falling faster than home prices as a growing number of middle-class families start to cut their accommodation budget in anticipation of salary cuts amid a bleak economic outlook.
Industry experts forecast residential rents will plunge as much as 15 per cent this year. Rents at Taikoo Shing – a housing estate targeting middle class families with household income of HK$80,000 to HK$100,000 a month – have fallen 16 per cent from their peak in October last year compared with an overall 11 per cent drop in home prices over the same period.
“We have seen more leasing transactions record low rents on Hong Kong Island than in other districts. It reflects that middle class families are more careful in budgeting their expenses to prepare for tough times to come,” said Wong Leung-sing, an associate director of research at Centaline Property Agency.
These families now may settle for lower floors or move out of more expensive areas to look for more affordable accommodation, he added.
Landlords will need to react promptly by adjusting their asking rents downward if they want to find tenants before market sentiment turns worse, he said.
In the fourth quarter in 2015, Hong Kong Island accounted for 24.1 per cent of residential leasing transactions, according to deals brokered by Centaline – with rents ranging from HK$15,000 to
HK$19,999 per month. This compares to 20. 6 per cent of all transactions in the third quarter, and 19.5 per cent in second quarter.