The arrival of the summer rental peak season has driven a surge in demand from mainland students seeking housing in Hong Kong, leading to tight supply conditions across districts and consequently pushing up residential rents. However, forecasts indicate that the second half of the year will see the delivery of 15 brand-new developments, totaling over 7,800 units.
According to market analysis, investors are expected to hold between 25% to 30% of these units, suggesting that approximately 1,900 to 2,300 new rental units will become available, potentially easing the current housing supply shortage. Industry insiders believe that the continued influx of high-quality talent will further drive demand in the rental market, sustaining the upward trend in residential rents.
Statistics from Midland Realty show that the second half of the year will see the gradual delivery of 15 new developments, involving 7,832 units, marking a 42% increase from the first half of the year. The largest project is YOHO WEST Phase 1 in Tuen Mun, which will offer 1,393 units. While most projects were originally slated for completion this quarter, some developers have recently notified agents that government-approved occupancy has been extended by three months, with gradual deliveries expected to commence no earlier than November.
Many of the new units in these developments are studio or one-bedroom apartments. For instance, LARCHWOOD in Mong Kok offers units starting at 181 square feet. Another example is Leo One in Mong Kok under Henderson Land, comprising 614 units with the smallest unit starting at 184 square feet. As of mid-last month, approximately 543 units have been sold, with developers accelerating the pace of handover to meet market demand.
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Stanley So, Managing Director of Residential Leasing at Midland Realty, revealed that Leo One in Mong Kok will begin occupancy in the near term, with 21 units already available for rent. Studio units start at HKD 14,000 per month, while one-bedroom units command rents of approximately HKD 17,000 per month. There is also a pre-lease case where a one-bedroom unit with a practical area of 259 square feet rents for about HKD 16,500, yielding approximately 3.3%.
Additionally, six projects along railway lines are expected to be more popular in the market, involving a total of 3,386 rental units. However, frontline agents indicate that these projects are expected to begin occupancy around the end of the year, with no leasing information currently available.
Bruce Lee, Executive Director of Residential at Midland Realty, noted that the second half of the year will introduce 7,832 new units to the market, a substantial figure. Considering that investors are expected to hold a portion of these units, the actual number available for rent is estimated at around 2,300 units, indicating that the market has sufficient capacity to absorb this new supply.
In addition to the rental demand from mainland students, various talent attraction schemes implemented by the government continue to attract high-quality professionals to Hong Kong. Government data indicates that over the past 18 months, more than 300,000 talent applications have been received, with 60% approved, bringing nearly 130,000 talents to Hong Kong. As most newly arrived talents opt for rental housing, this further fuels demand in the Hong Kong rental market, consequently driving up rental levels.
