Rents for Hong Kong’s luxury homes fall by as much as 25 per cent as coronavirus causes job losses, expat exodus
- Rents in Hong Kong’s high-end districts like Mid-Levels have been hit hardest, tumbling by up to a quarter from their peaks, according to agents
- Rents at the lower end of the market, in areas like Sheung Wan and SoHo, are also softening as many young professionals are losing their jobs
The slide in Hong Kong’s rents is getting steeper as the coronavirus crisis and protests lead to job losses and an exodus of expats and students fleeing the city.
Rents in high-end districts have been hit hardest, tumbling by up to a quarter from their peaks, according to agents, while data showed the average rate across the whole city slumped to the lowest in almost three years in February.
“The virus is reducing demand for properties as people either leave Hong Kong or have less job security,” said Victoria Allan, founder and managing director of real estate agency Habitat Property. She said rents shrunk 15 to 20 per cent in the sought-after Mid-Levels and the southern district between June last year and March.
Downward pressure is more obvious on rents above HK$100,000 (US$12,894) per month and also larger blocks where there is existing vacancy, said Allan. Rents at the lower end of the market, in areas like Sheung Wan, Sai Yung Pun and SoHo, are also softening as many young professionals are losing their jobs.
The city’s unemployment rate climbed to a nine-year high of 3.7 per cent in February.
“We have seen a spike in people breaking their leases because of job losses,” she said. “Many tenants are also nervous to sign new two-year leases, so are extending existing leases for shorter periods while they check job security.
“The fall in luxury home rents will be bigger as there is less demand. It will only fall further, [particularly for] properties that are not well renovated.