Mass residential housing rents in Hong Kong jump more than 20% in a year

HONG KONG: Rents in mass residential housing in Hong Kong have surged more than 20% in the past year and the trend is likely to continue, according to property agents.

Monthly rents at 100 selected housing estates averaged HK$18.40 per square foot in May, according to data compiled by Midland Realty.

That was a 22% increase on the same month last year. It was also 5.9% higher than December's average of HK$17.32 per square foot.

The biggest growth was seen in Kingswood Villas in Tin Shui Wai, in the New Territories, where rents were up 36.8% against May last year.

Next was Heng Fa Chuen, on Hong Kong Island, where rents rose 35.2%.

Research by another leading agent, Centaline Property Agency, turned up much the same results, with the monthly rents at 73 housing estates last month averaging HK$17.40 per square foot - a 5.5% increase compared with December's HK$16.50 per sq ft.

Residential rents have risen for 14 consecutive months, showing cumulative growth of 31.8%, Centaline Property research head Wong Leung-sing said.

"If mass housing rents go up another 17.2%, it will be back to the record high of HK$20.40 per square foot achieved in September 1997," said Leung, who believes that figure could be reached in the next two years.

Midland Realty chief analyst Buggle Lau Ka-fai also expected to see a rise in residential rents given the growing demand but falling supply.

Meanwhile, the housing market has become more active since the government sold a residential site in Ho Man Tin for a higher-than-expected HK$10.9 billion at public auction this month.

According to data compiled by Ricacorp Properties, there were 713 preliminary sale and purchase agreements signed from June 14 to 20 - a 38% rise week on week.

Flat owners usually prefer to offer their properties for sale rather than for lease in a strong sales market, leading to a decline in supply.

"However, summer is always the peak season for the residential leasing market, when demand will increase. We see rentals continuing to rise," Midland Realty's Lau said. — South China Morning Post