Betting on Chinese demand, Hong Kong developers turn to rental market
HONG KONG: Some Hong Kong developers are now turning to housing rental and the leasing market to weather a prolonged downturn in its property market and to serve surging rental demand from mainland Chinese professionals and students.
The shift in developers’ strategy is a rare move in a city that boasts some of the world’s highest property prices and underscores the changing demographics in Hong Kong.
The former British colony had seen an exodus of residents including expatriates after anti-government protests in 2019 and then the pandemic, with the population gap now largely filled by an influx of mainland Chinese following a range of talent admission schemes launched in 2022.
Rents of private homes in Hong Kong in July rose to their highest level in nearly five years, while home prices dropped 22 per cent during the same period, latest data showed on Wednesday.
With locals also opting to rent rather than buy due to an uncertain economic outlook, many realtors expect the diverging trend of home prices and rents to continue in the near term.
Earlier this month, Henderson Land, a major Hong Kong developer, said it was putting part of its “Baker Circle Dover” project in the Kowloon peninsula up for rent instead of sale.
It did not disclose how many units are available for rents but said more than 20 units were leased out within one week, with monthly rents ranging from around HK$14,000 (US$1,795) for a studio to HK$19,000 for a one-bedroom flat.
Traditionally, developers usually put up all their flats for sale in a residential development.
“Prompted by the government’s various measures on talent attraction, demand in residential leasing market has surged,” Henderson said in a statement. “(Hence we are using) part of the previous launches to respond to the market.”
Its smaller peer Chevalier International also announced earlier this month that it would save all 58 flats in a new building in a neighbouring district for rental to meet demand.
Source: Reuters
