Hong Kong home rents hit record high on strong Chinese demand
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The growing rent comes amid a sustained influx of mainland Chinese immigrants on new visa programmes to Hong Kong in recent years.
PHOTO: REUTERS
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HONG KONG – Hong Kong residential rents hit a record high as demand from new arrivals to the city offsets a wider real estate downturn.
The rental price index rose slightly in September from August, to the highest since records began in 1993, and held that level in October, government data showed on Nov 26.
The growth comes amid a sustained influx of mainland Chinese immigrants on new visa programmes to Hong Kong in recent years.
The newly adjusted index value for September, released on Nov 26, surpassed the previous record set in August 2019.
Analysts now expect an improvement in rental returns as lower borrowing costs help to boost investment demand for homes, lifting the lacklustre sales market.
The rate cut by the Federal Reserve in September has “improved mortgage affordability and boosted buyer confidence”, said Ms Hannah Jeong, head of valuation and advisory services at CBRE Group in Hong Kong.
She said: “Now with good yields due to rental increase generated from the residential sector, it can attract both investment and end user demand.”
The arrival of Chinese immigrants in Hong Kong has increased demand for rental housing.
The government has approved about 350,000 applicants for work visa programmes aimed at attracting skilled labour to the financial hub in recent years.
More than 230,000 have arrived in the city, according to the government.
Hong Kong’s official rental index has been increasing for almost a year and is now 0.05 per cent higher than the previous record set in the summer of 2019.
Hong Kong’s home prices have been struggling to recover after a four-year downturn.
Values remain around 25 per cent lower than the peak in 2021, data from Centaline show.
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