Luxury residential rentals declined in 4Q23

Some tenants reportedly prefer renting instead of owning.

Luxury residential rentals across Hong Kong experienced low demands in the fourth quarter (4Q23), Savills reported.

In Hong Kong Island, luxury residential rents fell -0.5% in 4Q23 from 0.9% in 3Q23, while Kowloon saw a 1.9% dip from 4.-0% and New Territories fell -0.6% from 0.9% in 3Q23.

The number of high net-worth expats with family members has declined post-pandemic and the residential leasing budget for these tenants may slightly drop under the difficult macro-economic circumstances.

Meanwhile, corporate tenants who usually come from Asia and Europe occupy apartments with $40,000-$50,000 monthly rents, particularly those in Mid-levels and Central.

Demand for townhouses also fell to 2.% from 4.2%. For serviced apartments, demand grew -0.6% from -0/1% QoQ.

Serviced apartments in Central attract ex-pats with short-term leasing contracts.

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Western District service apartments attract professors, mainland students, and exchange students due to its proximity to educational institutions. Monthly rents for this demographic range from $15,000 to $20,000. 

For the mid-high-end residential market, property prices have continued to decline over the past two years. Some experts such as doctors and lawyers, are opting to sell their properties and choosing to rent instead. 

As a result, leasing demand could see a rise, while property prices might face upward pressure.

Notable transactions for mid-level residentials include the Peak, costing $650,000 per month and a Southside house worth $600,000 a month.

In Kowloon, the biggest transaction is the Kadoorie Hill apartment worth $200,000 per month. In the New Territories, the Sai Kung apartment can be rented for $90,000 a month.