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Thursday, July 14, 2016, 18:50

Rentals rise as property market rebounds


HONG KONG - Rents for private domestic homes in Hong Kong are increasing as the property market recovers - especially at low and high ends of the market.

Rent rises are predicted to continue due to the rebound in property prices, the shortage of rental properties and the influx of mainland undergraduates. They are expected to raise rents by 5 percent for the second half of 2016. Lower-priced estates in the New Territories are particularly in demand.

This is the first recovery in the market after seven consecutive months of declines.

According to the Rating and Valuation Department, the rental indices of private domestic homes rose from 163.3 in April to 164.1 in May – a 0.48 percent month-on-month increase – following an increase in the price indices of private domestic homes.

According to Midland Realty, rents at six out of the top 10 private estates have risen by 3 to 12 percent since January. Over 2,530 rental transactions were recorded in the “Top 10” in the first half of 2016, a 10 percent increase compared to the last half of 2015 (about 2,300 rental transactions).

The supply of rental properties is failing to meet demand. The industry predicts that the rental price will go up by 5 percent in the later half of 2016.

An influx of mainland undergraduates is boosting rental prices. Due to the insufficient number of dormitories provided by universities, many mainland undergraduates decide to rent private flats near universities. Festival City in Tai Wai and Harbour Place in Hung Hom are two areas popular with mainland undergraduates, showing a 6.7 percent and 3.3 percent increase, respectively, in the first half of the year, Midland Realty said.

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