Hong Kong rents set to hit record high as talent influx fuels demand
The rental index is about 3 per cent away from the peak seen in August 2019, a jump that is not entirely implausible, JLL says
With the rental home index in July rising by 1.1 per cent month on month to 194.1, the gauge is 6 points shy of the peak of 200.1 recorded in August 2019, according to official data.
More rent increases are in the offing, which could spur developers to shift their unsold flats to the leasing market instead of selling them, analysts said. In such an event, rents could go past the HK$21.30 (US$2.73) to HK$41.48 per square foot per month range reached five years ago.
“The current market conditions are clearly characterised by limited supply and robust leasing activity,” said Cathie Chung, senior director of research at JLL in Hong Kong.
The rental index will continue its upward trajectory throughout September and likely reach an all-time high this year, although the margin of increase may be modest, she added
Chung said that for the rental index to hit a record, it has to register a year-on-year jump of 8.2 per cent in August, an “optimistic” scenario but “not entirely implausible”. In July, rents surged 6.6 per cent year on year.
