Apartment rents in HK sink to lowest in nearly 2 years

Hong Kong

APARTMENT rents in Hong Kong have dropped to the lowest in almost two years as people leave the city and home owners try to lease rather than sell.

Advertised residential prices on a per-square-foot basis are the least since March 2018, data from property agency Spacious showed. While the city's rents have been under pressure since anti-government protests started in the middle of 2019, the spreading novel coronavirus outbreak is also dampening demand.

"People with partners or spouses who are not working, or children who are not at school, they are relocating now for the time being," said Letizia Garcia Casalino, Colliers International's head of residential services.

In some instances, landlords are willing to offer tenants discounts as steep as 12 per cent from current levels, she said.

The coronavirus outbreak is also weighing on secondary-market sentiment.

Even though home prices inched up 1 per cent between Jan 19 and Feb 9, according to the latest Centaline data, local media has been reporting on some transactions where home owners have sold at a loss.

Other home owners who are not keen on cutting their asking prices are instead trying to lease out their properties, increasing supply and adding to pressure on rents, said Matthew Hung, deputy regional sales manager at Centaline Property Agency.

"Some sellers don't want to let go of their property at a cheap price," he said. "They expect the disease will end soon and therefore they would rather rent the apartments out in the meantime." BLOOMBERG