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The Ocean Pride residential project in Tsuen Wan. Photo: Felix Wong

Tsuen Wan, Tseung Kwan O and Kai Tak – three districts where renters can find cheap bargains

  • The surge in the number of rental listings as new developments become ready for occupation is adding downward pressure on rents, agents say

Renters can look for bargains in Tsuen Wan, Tseung Kwan O and Kai Tak as a few thousand flats will soon be available for leasing, further adding downward pressure on rents.

In Kai Tak, some 2,400 flats will be ready for occupation in the first half, with 424 listings available already, according to Centaline Property Agency.

These include the 822-unit Victoria Skye, 930-unit Vibe Centro and 648-unit Oasis Kai Tak.

Oasis Kai Tak will be ready for occupation in the first half of this year. The photo shows construction as of September 15, 2017. Photo: Felix Wong

In Kai Tak, owners of the 900-unit K City began taking possession of their flats this month. The development has the highest number of listings in the area at 271 and also the lowest average asking rent per square foot at HK$43 (US$5.48), according to Terry Ng, senior regional sales manager at Centaline.

Wilson Kong, principal regional director at real estate brokers Hong Kong Property, said rents at Kai Tak have fallen about 10 per cent since last year on expectations of higher supply and could drop by another 5 to 7 per cent in the first half.

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In south Tseung Kwan O, the rental market has swelled by about 200 units, said Ken Lau, assistant regional director at Hong Kong Property, as owners of the 605-unit Alto Residences, 857-unit The Papillons and 926-unit Monterey were handed keys in September, October and December respectively.

Lau said the average rent per sq ft at the three developments has dropped 20.9 per cent from HK$43 during pre-lease to HK$36 at the start of this year, but they are unlikely to drop any further in the coming six months.

Rents have been falling at The Wings in Tseung Kwan O. Photo: Handout

He said that a 883 sq ft flat at The Papillons was rented out at the beginning of January for HK$24,000 a month, or just HK$27 per sq ft, the lowest for the development.

The wave of new projects have led to rental declines of about 6 per cent at older developments like The Wings and Park Central.

A 538 sq ft flat at the seven-year-old The Wings was let for HK$21,000 a month, or HK$39 per sq ft in December, down 6.7 per cent from that achieved by an identical flat rented in November.

Another flat of 406 sq ft at the 16-year-old Park Central was rented at HK$15,500 a month, or HK$38.2 per sq ft in December, down 6.1 per cent from that achieved by an identical flat in November.

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In Tsuen Wan, rents have fallen 6 per cent since August and could drop a further 5 per cent, according to Ringo Leung, sales director for Tsuen Wan district at Midland Realty, as some 3,359 flats will be ready for occupation in the first half of this year.

First up is the 970-unit Ocean Pride, which will be ready for occupation later this month.

“[Since Ocean Pride] is in a more convenient location renters may go for it, forcing homeowners at [other estates] to reduce rents,” said Leung.

According to Paul Yue, senior regional sales manager at Centaline, Ocean Pride has some 100 rental listings at about HK$40 per sq ft a month, adding that it was on par with the market rate.

At the 983-unit Pavilia Bay, a five-minute walk from Ocean Pride, 45 units are available for rent at an asking price of HK$42 per sq ft a month, said Albert Ching, senior regional sales director at Centaline.

Pavilia Bay was ready for occupation in October.

Meanwhile, the average rent per sq ft across Hong Kong stood at HK$35.9 per sq ft in December, down 5 per cent from August with all gains in 2018 erased, according to Centaline, which tracks 107 estates.

“Because of the US-China trade war and housing policies revealed in late June, the property market is in correction, leading to dropping rents,” said Wong Leung-sing, senior associate director of research at Centaline. “The average rent is likely to drop to about HK$33 per sq ft in the first half this year, after which there will probably be no further declines.”