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SCMP Editorial

To buy or to rent – that has become a big question for locals as well as new arrivals to Hong Kong. Rents are set to shoot past the previous peak in August 2019.
Robust demand comes from newly arrived residents, and potential buyers waiting for interest rates to drop are sitting on the sidelines. An influx of international students and professionals – mostly from the mainland – will look to renting.
The government’s talent scheme has drawn 93,000 applications, of which more than 73,000 were approved. Of those applicants, 60,300 have already arrived in the city.
They will probably choose to rent and observe the market and get a feel of the land before committing to buying.

As the US Federal Reserve is widely expected to start a new easing cycle next week, it makes sense for potential buyers to wait for lower mortgage rates.
The downturn of the property market has been a key driver of increased rental demand, which in turn has lured more developers into the leasing market. Some with unsold flats are leasing more of them.
Henderson Land, one of the city’s three biggest developers, has put 34 units for lease at The Henley III in Kai Tak at HK$16,000 (US$2,051) to HK$17,000 a month. And, in Fanling, the company has 23 units at the One Innovale for lease at a starting price of HK$9,500 a month.
In July, local developers had 22,300 unsold residential units, about 1.7 per cent higher than the 21,900 they had at the end of 2023, according to Midland Realty.
In the next three to four years, as many as 109,000 new flats are expected to hit the market. With a deluge of new private units, people are waiting for more choices to become available.
As a result, those who rent will have to put up with higher costs. But the situation may be temporary.
If local commercial banks do follow the highly anticipated rate cuts in the United States, interest in buying may yet revive. A reversal may indeed be in the offing.
Once property prices stabilise and sales start to pick up, buyers will return, and fewer renters will help relieve pressure on high rents.


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Hong Kong

Hong Kong renters look to cuts in interest rates for relief

A downturn in Hong Kong’s property market is driving an increase in rental demand, which in turn is luring more developers into the leasing market. Photo: Bloomberg

A jogger runs past the US Federal Reserve building in Washington. With the Fed widely expected to start a new easing cycle next week, it makes sense for potential buyers to wait for lower mortgage rates. Photo: Reuters

Hong Kong rents set to hit record high as talent influx fuels demand

Hong Kong’s residential rental market is on a tear, with rents likely to go past a previous record set in 2019. Photo: Martin Chan

Residential properties for sale and rent are displayed at real estate agencies in Hong Kong. Photo: Jelly Tse

2,800 new flats are poised to launch in Hong Kong as developers await interest rate cuts

Part of the Yoho Hub complex in Yuen Long, pictured on December 17, 2021. Photo: Jonathan Wong

Prospective buyers stand in line for a sale of the Blue Coast housing project, developed by CK Asset Holdings, on April 6, 2024. Photo: Bloomberg

Opinion

Influx of international students and professionals to the city during property market downturn has helped push up residential rents


Influx of international students and professionals to the city during property market downturn has helped push up residential rents.


Hong Kong property

Property policies

Interest rates

US Federal Reserve

United States

Banking & finance

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

Editorial

Editorial | Hong Kong renters look to cuts in interest rates for relief

Influx of international students and professionals to the city during property market downturn has helped push up residential rents