The government's "talent rush" programme, coupled with high interest rates, has prompted some buyers to switch from buying to renting, stimulating the residential rental market to become even more buoyant, and estate agents have been doing their best to make rentals.
According to Centaline Property Data, Hong Kong's property market has been experiencing the phenomenon of "renting outperforming buying and selling" for 25 consecutive months, with more than 3,000 second-hand rental transactions recorded in July, a record high. There is a rush for rentals in Hong Kong Island, with the rent of a 1-bedroom flat on Hong Kong Island reaching as high as $90 per sq ft.
Mr Chen Yongjie, Vice Chairman and Chief Executive Officer of Residential Department of Centaline Property Asia Pacific, said that under the cloud of interest rate hike, the property market has been slow, with less than 1,000 transactions in the primary market for two consecutive months, and some members of the public are optimistic about the future market for fear that property prices will fall, so they have switched from buying to renting, coupled with the fact that it is the peak season for Mainland students to come to Hong Kong for renting, and the government's importation of talents have also joined in the scramble for rentals one after another, which has further boosted the demand for rented flats, and a heated atmosphere in the renting sector. The demand for rental flats in Hong Kong has been further boosted by the importation of "talents" by the Government.
The situation that "renting outperforms buying and selling" in the property market continues. Taking the transactions facilitated by Centaline's Residential Division as a reference, the number of first- and second-hand sales and purchases fell to only 800-odd last month, a month-on-month drop of nearly 20% and a record low this year, while the number of transactions of second-hand renting last month reached a record high in the history of the bank, with as many as 3,100 transactions, which exceeded sales and purchases by a factor of 2.8.
In the first seven months of this year, more than 15,000 rental properties were transacted through Centaline, about 70% more than the 8,800 transactions, reflecting the public's desire to rent rather than buy amid the uncertainty of the property market.
Centaline's Chan Wing Kit said that the supply of rental flats does not meet the demand, coupled with the fact that the vast majority of professionals arriving in Hong Kong may choose to rent a flat first, this year's rental increase is likely to outperform the price of flats, and the rate of increase in the second half of the year is expected to be more than 10%.
Looking up the data, Centaline's last "buy-sell-exceed-rent" was the bull market of 2021, which led to more than 21,000 rental transactions but even more buy-sells, amounting to 22,000 transactions in the whole year.
As for the last "buy-sell-over-rent" month, it was June 2021, when more than 2,300 first- and second-hand sales and purchases were recorded, more than 20% more than the number of rental transactions. In 2021 alone, there have been six occasions when property prices were higher than rents, all of which occurred in the first half of the year before property prices peaked.
If we analyse the residential rental transactions in July, the monthly rent of less than $20,000 for car rental, accounting for nearly 60%; monthly rent of $10,000 less than 90 cases, the most affordable private property transactions, for the open-plan unit in Tuen Mun Evergrande Tuxedo Bay with a monthly rent of $7,000.
Occupation site rent more and more expensive, new land (016) and other development of Kennedy 38, last month has been closed for occupation, a low floor with a podium features, 271 square feet of saleable area, with 107 square feet of podium, is a 1-bedroom, has just been rented out at $ 24,500 per month, the rent of $ 90.4 per square foot, a record high project.
The city has been in a rush for rentals. Lee Koon-chiu, Senior Senior Regional Director of Centaline Property, said more than 520 rental transactions were recorded in Shatin in July, with City One Shatin accounting for the largest number of transactions at 96, followed by City of Fame in Tai Wai and the newly-arrived Foreshore StarCraft Embankment, which recorded 79 and 61 transactions respectively. Tseung Kwan O also recorded about 660 letting transactions last month, which is the highest this year.
The number of flats for rent on Centaline Property's website has dropped from 15,953 at the end of last year to the latest 13,138, a drop of 17 per cent. Chan Wing Kit believes that in the face of the shortage of rental properties, coupled with the fact that the vast majority of professionals arriving in Hong Kong may choose to rent a flat first, the rate of rental increase this year is likely to outperform the price of flats, and the rate of increase in the second half of the year is expected to be more than 10%.
As a matter of fact, the Hong Kong Government aims to import 35,000 talents each year. In the first half of this year, the authorities have approved about 61,000 applications under the Admission of Talents Scheme, which has become a huge source of tenants for investors to buy flats and collect rents. Therefore, he believes that "Hong Kong is not worried about not having any tenants for buying properties for rent".
The number of buy-to-let tenants is on the rise in the interest rate hike environment, but those who don't buy may have to pay high rents. The Rating and Valuation Department (RVD) Property Price Index has fallen for two consecutive months, but rents have risen for five consecutive months, with a cumulative increase of more than 4% to 181.1 points in June, which is back to the January 2022 level.
