Hong Kong housing rents inch towards record high on Chinese demand

HONG KONG – Hong Kong’s rental housing market is expected to hit a record high by October, fuelled by a wave of Chinese students and professionals moving to the city. 

A steady inflow of mainlanders is bolstering rents in pockets of Hong Kong, with rates in the North Point district jumping 8.8 per cent compared with a year ago, owing to its convenient location.

On average, asking rents in July were up 1.1 per cent from the previous month, close to a historic high, according to online property listing platform Spacious.hk. Rents are now just 2.2 per cent below their peak in 2019, and on track to reach a record in two months, the firm estimates. 

A 570 sq ft one-bedroom unit in North Point’s relatively new development Fleur Pavilia is asking for HK$32,000 (S$5,200) a month, a listing shows.

“Rents will likely continue rising mainly because demand is strong,” said Mr Simon Fan, a realtor with Centaline. “When mainland Chinese clients come to Hong Kong, they still wait before buying, so they rent instead.”

The Mid-Levels West neighbourhood has seen rents increase about 10 per cent in the past year, largely underpinned by Chinese professionals and students who like the area’s proximity to the business district and The University of Hong Kong, Mr Fan added.

The financial hub has approved about 340,000 applicants for work visa programmes aimed at expanding the labour force. More than 220,000 have arrived in the city, according to government data. 

Hong Kong previously saw an exodus of expatriates

during the Covid-19 pandemic because of the government’s strict quarantine measures. The decline among this population segment continues to weigh on rents in areas popular with foreigners. Rents in the Deep Water Bay area dropped 17.2 per cent in July from a year earlier. 

In terms of volume, Centaline recorded nearly 2,000 leasing transactions in the first four weeks of July, a jump of 30 per cent from June. 

Some landlords in popular neighbourhoods are taking the opportunity to raise rents. Ms Abi Zhang and her roommates were told in June that they would have to pay 20 per cent more, two months before the end of their current lease. The 27-year-old financial professional found it unacceptable and moved out of the property in Kai Tak, an area favoured by middle-class mainland immigrants. BLOOMBERG