As Singapore’s soaraway rental boom cools, Hong Kong rents start to heat up

Rents in Singapore’s prime districts, typically favoured by expatriates, have cooled as rental growth across most sectors has also largely moderated

It comes as the city state’s policy measures to tackle soaring prices start to work – and as Hong Kong reaffirms ‘its resilience as a financial hub’

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Residential and commercial buildings in Singapore. Rental growth across mass-market flats and high-end apartments has largely moderated in the city state, the latest data shows. Photo: Bloomberg

Published: 1:04pm, 19 Sep 2023

Hong Kong rents are rising again as overseas workers return, a recovery that contrasts with the cooling market in rival financial hub Singapore.

Hong Kong rents rebounded from their first-quarter decline to climb 2.8 per cent in the second quarter of 2023, Knight Frank data shows. While Singapore recorded the same pace of gains, growth in the latter city’s rents was the weakest since 2021 and down from a recent peak rate of 8.6 per cent.

The push to reverse a brain drain of talent during the pandemic is encouraging new arrivals to target Hong Kong neighbourhoods popular with professionals, such as SoHo and Kennedy Town. In comparable districts in Singapore, growth rates are now about half that as stellar figures from previous years give way to relatively lacklustre increases.

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The contrast in performance between rental markets in two of Asia’s prime financial hubs underscores Hong Kong’s path to recovery from the pandemic as people from overseas flow back into the city. Meantime, in Singapore, policy measures ahead of an election to tackle soaring property prices are starting to work.

“The trend is poised to persist, with Hong Kong’s rental market rebound affirming its resilience as a financial hub,” said Christine Li, head of research for Asia-Pacific at Knight Frank. “Singapore’s decelerating rental market may offer relief to expatriates previously deterred by escalating rents.”

Hong Kong rents remain on average about 9 per cent more expensive than Singapore’s, according to Knight Frank data. Hong Kong has seen its strongest rental market since July 2018, said James Fisher, chief operating officer at real estate platform Spacious.hk, who expects rents to rise another 2 per cent to 3 per cent by the end of this year. Bloomberg Intelligence forecasts vacancy rates in the city’s residential units to fall by December.

“When there is not just one but several headwinds hitting the residential market, they may choose to rent,” Fisher said, alluding to the recent surge in interest rates on mortgages and the drop in sales.