Business
Hong Kong’s Rental Market Soars as Home Prices Hit 8-Year Low: Seasonal Renters and Market Speculation Drive Trends
Residential rents in Hong Kong are soaring close to all-time highs as apartment costs continue to plummet. Analysts attribute this development to a seasonal boost in the number of tenants and predictions for a continued drop in home prices.
Last month, housing rents in Hong Kong escalated to the fourth highest rate ever recorded, while the cost of pre-owned homes dropped to the lowest point in eight years. This is attributed to an increase in the number of tenants during the seasonal period and predictions that the value of houses will continue to decrease, as per market analysts.
The city's authoritative residential rent index experienced a 1.13 per cent increase, reaching 197.5 in August, up from July's figure of 195.3. This information was provided by the Rating and Valuation Department on Thursday. There was a significant 6.8 per cent rise in rents compared to the same period last year.
In other news, the cost of secondary homes dropped by 1.72 per cent on a monthly basis in August, resulting in an index score of 292.1. This marks the fourth consecutive month of decrease, hitting its lowest since it reached 287.6 in August 2016. The price of lived-in homes has fallen by 13.32 per cent annually and 6.17 per cent since the close of 2023.
The numbers don't illustrate the market's response to the half-point cuts in interest rates implemented last week by the US Federal Reserve and the Hong Kong Monetary Authority. With further policy relaxation anticipated, it's likely that housing prices will settle and rental rates will soften in the near to intermediate future, as per the predictions of real estate advisory firm CBRE.
Nonetheless, real estate firm Ricacorp Properties predicts a 9 per cent rise in rents this year, pushing the index to an all-time high.
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