Desperate landlords start giving away 5-10% discount on housing rents

Another strategy to keep tenants renting their units.

In Hong Kong's residential leasing market, it has been observed that landlords are more willing to accept renewal rents at a 5% to 10% discount.

According to a research note from Savills, landlords prefer this rather than leaving their unit vacant.

Moreover, landlords are more flexible with leasing terms and are increasingly willing to upgrade the in-room facilities to maintain their competitiveness.

Here's more from Savills:

The luxury residential market was quiet in Q4/2014, approaching the year-end. Many tenants are postponing their letting decisions until after the holiday period and into Q1/2015.

The lack of demand for townhouses continues, putting pressure on townhouse rents, especially in the budget range of HK$100,000 and above.

Townhouse rents fell another 1.6% in Q4/2014 and dropped 12.2% over the year, while luxury apartment rents were more rose by 0.6% in Q4/2014 and dropped 6.3% in 2014 as a whole on the back of subdued demand, mainly from the financial sector.

Leasing market demand from banking and fi nancial fi rms continues to shrink, alongside the weakening Grade A office market, as many expatriates left Hong Kong in 2014, compared with 2013.

A high cost base in terms of commercial and residential premises compared to Singapore is an issue; many fund houses now prefer Singapore over Hong Kong as their Asian headquarters.

We have seen some demand from high-budget-users, mainly at the managing director level, as well as heads of equity funds.

Other demand drivers include I.T., logistics and the consumer goods sector, who are prepared to pay mid-range rents of HK$30,000 to HK$50,000 per month.