The luxury rental market in the Hong Kong Special Administrative Region is gaining momentum, driven by steady demand from an influx of deep-pocketed individuals and high-end professionals. Industry experts anticipate that rents in the city's prime residential districts will continue climbing in the year ahead.
The Peak and the Southern district — two of Hong Kong's most prestigious residential neighborhoods — recorded 392 leasing transactions in the first three quarters, increasing 8.9 percent compared to the same period last year, said Centaline Property.
The total value of these leases also rose 5 percent year-on-year, reaching more than HK$44.25 million ($5.7 million), the local real estate agency added.
Louis Ho Siu-tong, senior principal sales director at Centaline, said relocated employees working for foreign and Chinese mainland companies make up a certain share of the luxury tenant base.
Meanwhile, Ho said some luxury homebuyers now choose to rent before deciding to purchase. "The leasing market might benefit partly from this."
Analysts also attribute the robust rental activity to rising demand from high net worth individuals and professionals, particularly those from the mainland, as more people have moved to the city through the special administrative region government's talent admission drives and residency-by-investment program.
"The luxury leasing market in Hong Kong has seen a notable uptick in demand from young families, particularly those with professional backgrounds in artificial intelligence and emerging technology sectors," said Keith Chan, economist at Knight Frank Greater China.
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While the tenant mix is getting more diverse, Chan said he believes this demographic is contributing to a steady stream of renters in premium residential areas, reinforcing the market's resilience and appeal.
As of the end of June, the SAR government had approved nearly 140,000 applications under its various talent admission schemes over the previous 12 months, including the Top Talent Pass Scheme, the Admission Scheme for Mainland Talents and Professionals, and the Quality Migrant Admission Scheme (QMAS).
Under the QMAS, of the roughly 27,000 cases that have successfully passed the selection process in the past three years, 8,021 applicants came from innovation and technology-related fields.
In addition, Hong Kong has eased the minimum transaction price threshold for a residential property under the New Capital Investment Entrant Scheme from the previous HK$50 million to HK$30 million since Sept 17. Secretary for Financial Services and the Treasury Christopher Hui Chingyu earlier said the program has received more than 2,200 applications since its launch last March.
Looking ahead to next year, Ho predicts that the number of luxury residential leases and rents will maintain an upward trajectory, both increasing by approximately 5 to 10 percent.
Chan said that rents are expected to rise 3 to 5 percent, given the sustained demand from wealthy individuals, tech professionals and expatriates.
"The number of leases is also projected to remain stable or increase moderately, particularly in prime districts, as talent inflow and corporate relocations continue to drive leasing activity," he added.
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Property purchasing activity in the city has also rebounded. In October, Hong Kong registered 391 agreements for sale and purchase of residential building units worth HK$20 million and above, a 26 percent increase over September, according to data released recently by the Land Registry.
