According to the data released yesterday by the Differential Valuation Department, the private property price index in May fell 0.74% month-on-month, but the private property rental index rose by about 0.95% month-on-month, rising for four months in a row, and since January last year, that is, a new high of 16 months.

Large units regardless of sales price or rent are the best performance, that is, the sales price fell the least, the rent rose the most vigorous.

According to industry analysis, residential rents are supported by four favourable factors, including a large number of non-local professionals coming to Hong Kong to digest vacant units, and the backward trend of "falling property prices and rising rents" is expected to continue in the short term.

By the United States continued to raise interest rates, the mainland economic recovery is not as expected, as well as the new price of the sale of new discs to combat the second-hand transactions and other factors, the latest data from the Department of Differential Valuation, private residential property price index in May fell 0.74% month-on-month, at 351 points, ending a 4 consecutive rise.

But the index in the first five months of this year still rose about 4.87%, if compared with the historical high of 398.1 points in September 2021, it is a cumulative decline of 11.83%.

Divided by unit size, the property price index for Class A units (431 square feet or less) was 383 points in May, down about 0.8% month-on-month, the most declining unit category; Class E (1,722 square feet or more) was 309.6 points, down about 0.48% month-on-month, the least declining category.

As for rental performance is better than property prices, private residential rental index in May at 180.6 points, up about 0.95% month-on-month, rising for four months in a row, the index and since January last year, that is, a 16-month high.

The first five months of the year rose about 2.91%. All types of unit rent index reported an increase, among them the most increase for the E class units, the latest report 136.7 points, up 1.79% month-on-month; A class units rent increase is the slightest, the latest report 199.5, a slight increase of 0.25% month-on-month.

In fact, the data of Hong Kong Property Report 2023 by the Differential Valuation Department shows that the overall vacancy rate of private residential units in Hong Kong as of the end of last year was 54,967 units, with a vacancy rate of about 4.4%. It is believed that most of the professionals coming to Hong Kong will choose to rent a flat in the early stage. With the successive approval of various talent admission schemes, the vacant flats in Hong Kong are expected to be significantly absorbed and the rental performance will further strengthen.

Midland's chief analyst Lau Ka-fai pointed out that the second quarter is the start of the traditional peak rental season, and rents continued to rise in May. Midland's "Rent Trend Chart" rose about 0.9% in May, up four months in a row and hitting a 15-month high. In this elimination, May appeared "property prices fell, rents rose" situation, and for the last time appeared is June to August last year.

Liu Jiahui believes that four major factors have increased rental demand, including: the gradual improvement of the economy to bring support for rents; summer vacation, mainland students to come to Hong Kong to study also stimulate rental demand; the SAR government actively attract talent, "high-end talent pass scheme" response is enthusiastic, many talented people will come to work and live in Hong Kong, bringing new demand for the rental market; coupled with the return of overseas people to Hong Kong, the rental market is expected to benefit. Therefore, he expects that rents will continue to rise, and the backward trend of "falling property prices and rising rents" will continue in the short term.

Knight Frank Director, Head of Greater China Research and Consulting Wang Zhaoqi said, although the United States in June temporarily stopped raising interest rates once, but is expected to early next year to raise interest rates factors will fade, and the second half of this year, Hong Kong mortgage rates still have the opportunity to rise, affecting buyers on board, people changing properties and new mortgages. Since the customs clearance, the overall volume of transactions rebounded slightly, especially for small and medium-sized properties under 10 million, but the overall purchasing power of the market is still insufficient, it is expected that the first and second-hand transactions will hover around 5,000 cases per month, the property market still needs a number of good news to return to the atmosphere of the high property market in 2021.

Wang Zhaoge believes that the theme of this year's market is still dominated by "de-stocking", developers are more active in selling new properties from the second quarter, the average monthly turnover of the first-hand market is expected to be around 1,000 to 1,500 cases in the second half of the year. By the end of the stockpile, I believe that developers will be pushing for buyers in cash flow and rebate considerations, to provide more concessions and financial plans to attract buyers, some of the new developments have begun to reduce prices.