By Clare Jim
In a strategic move to adapt to a prolonged downturn in Hong Kong's property market and meet the increasing rental demand from mainland Chinese professionals and students, some developers in the city are now focusing on housing rental and leasing.
The shift in developers' strategy is a rare occurrence in a city known for its high property prices, highlighting the changing demographics in Hong Kong. The city has experienced an influx of mainland Chinese residents following various talent admission schemes launched in 2022, filling the population gap left by the exodus of residents, including expatriates, after the 2019 anti-government protests and the pandemic.
Recent data shows that while home prices in Hong Kong have dropped by 22% in July, rents for private homes have reached their highest level in nearly five years. With locals opting to rent instead of buy due to economic uncertainty, real estate experts anticipate the trend of rising rents and falling home prices to continue in the near future.
Major developer Henderson Land has already started offering part of its "Baker Circle Dover" project in Kowloon for rent instead of sale, with more than 20 units leased out within one week. Similarly, Chevalier International has announced plans to reserve all 58 flats in a new building for rental to meet the growing demand in the market.
The surge in demand for residential leasing can be attributed to the government's talent attraction measures, which have led to an influx of mainland Chinese residents. Property investors are also refurbishing various real estate properties, including hotels, commercial, and residential buildings, to cater to the increasing demand for student housing.
While there is a concern that an oversupply of student housing could lead to a drop in rents in the long run, students are currently willing to pay higher prices to secure accommodation near universities. This trend is evident in the recent increase in rents, with students like Julia Zhong from Shenyang, China, experiencing a significant rise in rental costs.
Overall, the shift towards the rental market in Hong Kong reflects the changing dynamics in the city's real estate sector, driven by demographic shifts and government policies. Investors and residents alike should pay attention to these trends as they can have a significant impact on housing prices, rental rates, and investment opportunities in the future.