Hong Kong rents could be about to march higher after five months of deflation, analysts say
- Hong Kong rents have depreciated 5.3 per cent from August through January
- Recent data indicates rate of deflation is slowing, suggesting a bottoming trend and paving way for possible return of a rising cycle, property analysts say
Hong Kong renters hoping for a prolonged bout of deflation could be in for disappointment in the next few months as data shows rental prices may be about to round the bottom, bringing an end to a soft patch that started in August.
On average, residential rents dropped 0.3 per cent to HK$35.8 per square foot (US$4.56) in January from December, the smallest contraction in the past five months, according to data released by Centaline Property Agency on Wednesday.
“It is a sign showing the end of the correction,” said Wong Leung-sing, senior associate director of research at Centaline.
He said the rental slump could end by the second quarter after declining since August.
Wong said an uptick in residential sales in January could be an indicator that the rental market will soon begin to firm, as the two markets are positively correlated.
“The residential sales market became more robust in January,” Wong said.