Hong Kong’s luxury rental market is starting to rebound

HONG Kong’s luxury rental market is showing early signs of a rebound after languishing behind other major cities during the pandemic.

Prime residential rents, defined as the top 5 per cent of the market, rose 1.9 per cent in the first quarter, according to a report from real estate consultancy Knight Frank. More expats are returning to the city after strict pandemic rules fully lifted early this year, and a new talent visa is attracting high-earners and foreign graduates. 

Knight Frank expects Hong Kong rents to rise 5 per cent in 2023, a notable turnaround from a 3.6 per cent decline in the 12-month period through March.

By comparison, luxury rents in Singapore surged 31.5 per cent year over year, the largest increase globally, according to an index tracking prices in 10 major cities. London, Sydney, Toronto and New York also saw double-digit growth.

Singapore’s rental market has surged amid an influx of foreign wealth, with prime rents rising 6.4 per cent in the past three months alone. In April, the city doubled its stamp duty for foreign homebuyers to 60 per cent to address concerns about unaffordability for locals. This forced some foreigners to rent rather than buy, adding pressure to the market.

Overall, Knight Frank’s Prime Global Rental Index rose 8.5 per cent in the 12 months through March, a slight slowdown from the 10.2 per cent growth in 2022.

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“With construction volumes remaining low due to material shortages and high build costs, rents globally are expected to continue to rise well above trend through 2023,” said Liam Bailey, Knight Frank’s global head of research. BLOOMBERG