Luxury home rents in Hong Kong may fall by as much as 15% this year as expatriates keen to escape the city’s strict zero-Covid-19 policy continue to leave. In the first quarter of 2022, rents for high-end houses and flats fell between 2.6% and 4%, with those in Kowloon and the New Territories seeing the biggest declines, according to property consultancy Savills. The decline could have been far steeper, as many landlords held off from accepting lower offers. But this quarter, depending on how Hong Kong moves forward with its quarantine and travel regulations, is likely to provide a clearer picture of how the luxury market fares for the rest of the year. “The luxury residential leasing market has been very quiet over the first quarter as expats were faced with yet more disruption to their personal and professional lives after a fifth wave of Covid-19 hit the city and the government responded with a range of exceptionally strict measures,” a Savills report said.
“We believe that March/April will probably see ‘peak exodus’, with expats moving either back to their own countries or to Singapore in a collective loss of patience at anti-pandemic measures.” Luxury homes are defined as those with a gross floor area of at least 1,500 square feet and average rents of HKD37.5 sq ft per month – a total rent of about HKD56,250. Victoria Allan, Founder and Managing Director of Habitat Property that mainly caters to expats, said a lot of tenants were leaving before their rental contracts had expired. “We are seeing a record number of broken leases in the market and expect rents to fall by up to 15%,” she said. “I think the market will continue to soften until it’s easier to be relocated into Hong Kong.” A survey of 260 executives by the European Chamber of Commerce showed that nearly half of businesses were considering moving elsewhere next year. French bank Société Générale is temporarily moving about a dozen traders from Hong Kong to Singapore.
On Hong Kong Island, rents in upscale neighborhoods and expat favorites such as Mid-Levels, Pok Fu Lam, The Peak, Happy Valley and Jardine’s Lookout fell between 1.4% and 2.7% in the first three months of the year. The declines were more pronounced elsewhere, with those in Ho Man Tin, Kowloon Tong, Discovery Bay, Sha Tin, Tai Po, Sai Kung, Tsim Sha Tsui and Hung Hom slumping between 3.4% and 5.3%, according to Savills, as reported by the South China Morning Post.
