Hong Kong rents may very well be about to march larger after 5 months of deflation, analysts say
On common, residential rents dropped 0.three per cent to HK$35.eight per sq. foot (US$4.56) in January from December, the smallest contraction prior to now 5 months, in accordance with information launched by Centaline Property Company on Wednesday.
“It’s a signal displaying the tip of the correction,” stated Wong Leung-sing, senior affiliate director of analysis at Centaline.
He stated the rental hunch may finish by the second quarter after declining since August.
Wong stated an uptick in residential gross sales in January may very well be an indicator that the rental market will quickly start to agency, as the 2 markets are positively correlated.
“The residential gross sales market turned extra sturdy in January,” Wong stated.
From a excessive of HK$37.eight per sq. foot in August, rents have deflated 5.three per cent within the 5 months by means of January.
January’s drop of 0.three per cent on month compares to the 1.9 per cent decline in December and a 2.1 per cent fall in November.
Centaline complied the information by itself leasing offers throughout 107 main residential communities in Hong Kong.
Ricacorp head of analysis Derek Chan believes the tempo of decline in rents will proceed to slender within the first quarter.
Whether or not rents will change again to an inflationary footing will rely on house sale tendencies, Chan stated.
He stated house costs may stabilise within the second quarter earlier than slowly climbing within the following quarter.
Is Hong Kong’s housing market recovering?
“Renters may take the present alternative to hire as this can be a seasonally slack interval. The market is more likely to warmth up in the summertime, the historically brisk season, and rents usually tend to choose up,” he stated.
Final week, a neighborhood couple signed a lease settlement on a 309 sq ft flat in Cheung Sha Wan at HK$46.9 per sq. foot. The month-to-month rental works out to HK$14,500, or about HK$2,500 decrease than the preliminary listed value, in accordance with Hong Kong Property.
Further reporting by Lam Ka-sing