Hong Kong luxury residential rents broadly flat in Q4

Rents on Hong Kong Island inched up 1% during the quarter.

Hong Kong’s luxury residential leasing market showed relative stability for the whole of 2021 as tenants barely moved in or out of the city. According to Savills, while rents drifted up marginally, they remain substantially down from the peak levels of 2018/19 (Townhouses -11%, Hong Kong Island apartments -13%, Kowloon and New Territories apartments -17%).

Furthermore, the market was presenting a very mixed picture by year end as expats began to tire of quarantine measures which are among the strictest in the world. International school places are currently abundant across all age ranges and with a further expat exodus expected early next year this is unlikely to change. 

Here’s more from Savills:

Luxury rents were broadly flat during the fourth quarter, with apartment rents on Hong Kong Island, Kowloon and the New Territories increasing slightly by 1.0%, 0.8% and 0.2% respectively. 

In the luxury apartment segment newcomers are typically focused on MidLevels, Southside and Clearwater Bay/ Sai Kung, the latter for its school offering including the French School in Tseung Kwan O and Clearwater Bay School in Clearwater Bay. Pokfulam meanwhile is regarded as good value for money (Baguio Villas, Scenic Villas) and we are waiting with interest to see where the refurbished Victoria Gardens rents are when it comes to market in the summer of 2022. 

Hong Kong Island apartment rents continued the rebound from the previous quarter, with Pokfulam (1.6%) registering the largest rise, followed by The Peak (1.3%) and Southside (0.9%).

While Discovery Bay on Lantau Island has a limited availability of apartments, small houses can still be rented for around HK$70,000 per month (good value by local standards). Cathay pilot housing budgets of HK$70,000 per month are likely to fall towards the end of 2022 and this could in turn soften the local rental market. While some PRC renting has been in evidence in Discovery Bay, the ferry service puts some off and we find that Mainland demand is more often focused on the New Territories and areas such as Kau To Shan, Yuen Long and Sheung Shui which offer better border access. 

Kowloon and New Territories apartment rents stabilized after declining in the previous quarter except Ho Man Tin/ Kowloon Tong (-0.6%) and Discovery Bay (-1.7%). Moderate rental increments were recorded in Sai Kung (+1.6%), followed by Tsim Sha Tsui/Hung Hom (+1.2%) and Sha Tin/Tai Po (+1%). 

Turning to the last quarter of 2021, townhouse availability remains extremely scarce and budgets of HK$250,000 per month plus are now dominated by mainlanders, some of who’s companies will have recently listed in Hong Kong. Expat rental budgets at this level are very rare these days. Southside developments such as Regalia Bay and Redhill Peninsula are fully occupied and there is very little market movement above HK$200,000 per month in the district. 

Townhouse rents rose 2.1% over the quarter, up from an increase of 1.4% in Q3/2021.