Hong Kong Apartments are now a Tenant’s Market

Posted on 07 May, 2021 | By Property852

There has hardly ever been a more fortuitous time to hunt for a Hong Kong apartment than at present. Despite being one of the World’s most expensive property markets, rent dropped down to just HKD 33.6 per square foot in the first quarter of 2021. That is the lowest price since the end of 2016. 

A standard two bedroom Soho apartment is currently available for approximately HKD 27,000 per month. Two years ago the same property would cost HKD 33,000 . 

With many of the expat community leaving Hong Kong following anti-government protests, higher unemployment rate and a population in decline, the Hong Kong rental market has remained slow even as price tags remain high.

The pandemic has also forced rent down in other financial hubs. London’s rental prices dropped by 8.1% over the last year and New York experienced a 14% drop. Singapore however bucked the trend with rent increasing 2.4%.

Exclusive property areas such as Deep Water Bay and Mid-levels traditionally favoured by rich mainland Chinese and Western Expats experienced the most dramatic drop. Rent in these areas fell up to 25% from prices recorded in 2019. Rental prices in Soho in the Sheung Wan district fell by 20% in the same space of time. This drop is believed to be due to the slow economy and transit difficulties that occurred as a result of the 2019 protests and worsened because of the pandemic.

Hong Kong apartment rents may reduce by up to another 10% due to the declining population and restrictions on travel. The population of Hong Kong dropped 0.6% in 2020 down to 7.47 million. This may reduce further still since the UK has received 27,000 applications from Hong Kongers wanting to relocate and claim British National Overseas visas.

In the first quarter of this year the economy did bounce back with the most zeal in the last ten years. However, in March the unemployment rate was still at 6.8%, the highest in 17 years apart from a similar peak in 2020.

Many of those young Hong Kong residents that lost their jobs have moved back in with their parents in order to save money. Nevertheless, rental prices remain high due to outsized demand for home ownership in the city. According to latest government figures rental yields dropped to their lowest point ever in February. Worst hit were large properties with homes  larger than 1,700 square feet falling to 1.8%.

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