Hong Kong property: landlords enjoy market rebound as students return, with city rents climbing to 15-month high
- Rents in private housing market climbed for a fourth straight month in May to the highest level in 15 months, according to a Centaline index
- ‘The peak season is expected to arrive early’ as students, professionals have begun to pre-rent, agency observes
Rents increased 1.4 per cent in May to 112.78 from a month earlier, according to the Centa-City Rental Index compiled by Centaline Property, which tracks 138 housing estates across the city. The rise was the most since a 1.94 per cent jump recorded in August 2018.
“Recently, students and [working] professionals have begun to pre-rent units, boosting rental transactions,” said Yeung Ming Yee, senior associate director at Centaline Property Research. “The peak season is expected to arrive early.”
The revival is injecting optimism among industry analysts, who predict the upturn will be sustained as Hong Kong welcomes back tourists and competition from mainland students drives up prices on long-term leases. Before the latest recovery, rents had slumped 8.2 per cent between the Covid-19 outbreak in early 2020 and the reopening in February 2023.
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Centaline expects rents to increase steadily through the end of the year. As the summer vacation approaches, Centaline said the short-term rental market is set to enter a seasonal boom. The firm’s index could climb by another 2.9 per cent to 116 in the third quarter, a level not seen since October 2021.
“With the government’s measures to attract top talent, overseas high income talent is expected to return or come to Hong Kong gradually,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. “We expect overall home rents to grow by 2 to 3 per cent this year.”
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The agency introduced the rental index as an alternative to government data to reflect the trend in the private housing market. It collects data from new leases signed by tenants in 138 major residential estates it tracks across the city.
The market rebound has affected mainland students like Frida Guan, who is renting a place near her campus at the Hong Kong Polytechnic University in Hung Hom, Kowloon. She will be paying an extra HK$1,500 a month from August after renewing her lease for another year.
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“The flat I rent is near the university and a lot of students are also looking for flats in this area, which is the main reason the rent has increased,” she said. Monthly rents have increased by HK$1,000 to HK$2,000, she gathered from chats with peers.
The Centa-City Rental Index for May showed the biggest increase on Hong Kong Island, with a 2.19 per cent jump from a month earlier. Kowloon and New Territories East recorded a 1.55 per cent and 1.27 per cent increase respectively. New Territories West was the only area that bucked the trend, with rentals slipping 0.04 per cent.
In terms of sizes, the Centaline data showed demand for units larger than 1,076 square feet was the most robust as rentals climbed 2.64 per cent, taking the five-month recovery streak to 5 per cent, the highest level since December 2021. Rents for small- and medium-sized flats increased by 1.26 per cent from April to revisit the highest level seen in August 2022.
Additional reporting by Cheryl Arcibal
