The Hong Kong Special Administrative Region’s rental housing market is on track for the biggest summer increase in a decade, as a recovery in one of the world’s most expensive real estate markets gathers steam, Bloomberg reported.
Rents in the Asian financial hub rose almost 4 percent in the first half of the year from the prior six months, according to Centaline Property Agency Ltd. A steady flow of Chinese mainland professionals and students, along with growing demand from expats, will lead to the biggest rent increases since the summer of 2016, property agencies estimate.
“Students and mainlanders are still helping to drive the hot rental market,” said James Fisher, chief operating officer at Spacious.hk, an online rental platform. “The primary difference between this year and the last couple years’ seasonal summer rent growth is definitely the strength of the expat market.”
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The spike in rents reflects a steady rebound as home prices rose for a 12th-straight month in May, extending the longest winning streak since 2018.
The revival is a boon to individual landlords who own apartments in sought-after areas like Sheung Wan and the Peak. While the city’s property developers don’t hold much rental inventory, a booming leasing market increases demand from investors that may fuel home sales.
But the gains also add pressure on students and new arrivals who are facing rental costs that often top New York and London on a price-per-square foot basis.
The Hong Kong SAR’s rental market has benefited from an inflow of mainland professionals on new talent admission programs in the past few years. The HKSAR government’s push to attract more foreign students to the city’s universities is also driving up prices.
A typical two-bedroom condo in the Sheung Wan neighborhood — a middle class area close to the business district — of 500 square feet (46 square meters) rents for about HK$34,000 ($4,340) a month on average, on par with apartments in New York’s Manhattan of a similar size.
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Hong Kong condos are smaller and pricier than those in other financial hubs, even though the gap has narrowed in the past few years after rents rose in New York.
Expat-oriented neighborhoods such as the Peak, Clear Water Bay, SoHo and Repulse Bay are seeing above-average rental growth, according to Spacious.hk. Traffic to the platform’s rental listings from overseas has increased 9.4 percent from a year ago, with searches coming from the US, Singapore, the UK, Australia and Japan all up by double digits.
Victoria V, an American who lived in Hong Kong for almost a decade until 2022, is moving back from Bangkok this month. Having left the city during the COVID-19 pandemic because of the travel restrictions, she said she missed the easy access to nature and the community of friends.
Victoria, who didn’t want her last name used, found a studio apartment with a private rooftop in Stanley, a seaside district popular among expats. Even though Stanley’s rental market was a price laggard in the first half of the year, it has recovered from a 9 percent decline recorded in 2024.
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In other areas, landlords are demanding more. Zhu, who moved to the Hong Kong SAR from the mainland 10 years ago, had her rent in Tin Hau raised earlier this year by 10 percent, the first increase in three years. The finance professional in her early 30s said the landlord’s decision was expected, given how much rents have increased across the market.
While she isn’t bothered by the hike given her job stability, she would consider moving if another increase comes along next year.
Looking forward, analysts expect rent increases to persist.
“The two main driving forces we currently see pushing up rent hikes — the talent visa programs and students coming to Hong Kong — will continue to grow in the near future,” said Benny Sham, research analyst at Midland Realty.
