Rents in Hong Kong are set to rise by 8 to 10 per cent this year – the biggest jump in 11 years – as students from mainland china and professionals entering the city thanks to the government’s talent-import schemes combine to create a landlord’s market, according to midland realty.
The average rent for private residential properties in Hong Kong in July reached hk$35.26 (us$4.50) per square foot, the highest level since October 2021, according to midland’s report. The company predicts the average rental price for the full year will be between hk$36.22 and hk$36.89 per square foot.
Hong Kong approved about 75,000 people under its talent-import schemes during the first seven months of this year, the report said. That is nearly double last year’s total of 38,000 and by far the highest number since 2008. Meanwhile, up to 40,000 mainland students are enrolled in the eight major universities in Hong Kong, the report said.
These factors will help the rental market to outperform the home purchase market this year, midland said. Home prices are widely expected to decrease in 2023, by as much as 10 per cent according to some forecasts, although midland expects a 5 per cent increase, according to its report.
“With the government’s ongoing efforts to actively attract talent, it is believed that there will be an increasing inflow of talent to Hong Kong in the coming year, which will subsequently boost the local property market,” said Sammy Po, chief executive officer of the company’s residential department.
Hong Kong’s current population of 7,498,100 is only 23,000 below a peak in 2019 after a net inflow of around 152,000 people between mid-2022 and mid-2023.
Moreover, the full impact of the talent schemes has not yet hit. “Of the total 152,000 increase, over 83 per cent occurred prior to the launch of the talent scheme in December last year, so the population growth resulting from the talent programme introduced in the first half of this year is yet to be reflected,” said Tina Cheng, senior strategy director of midland’s immigration consulting department.
Hong Kong’s population will increase by 100,000 to 7.598 million by the end of 2023, surpassing the 2019 peak by more than 1 per cent, according to the report. Students from mainland china account for 20 to 30 per cent of the overall rental market, but tend to pay lump sums for half a year or a full year in advance, Po said.
