As Hong Kong grapples with dwindling rental property appetite from population outflows, Singapore is catching up with Hong Kong’s rental market as the Lion City’s rentals are expected to soar on limited supply.
That’s the view of analysts, who say many factors impacting prices in the two cities remain intact. Singapore rents could rise another 10-15 percent in 2023, while those in Hong Kong may only post a 5 percent increase. Home rents in Hong Kong are predominantly more expensive when compared with Singapore. Yet with few signs of a rebound in the former, Singapore could continue to stand out in 2023 even with a slowdown in growth levels from the 30 percent surge last year.
Singapore rents are ‘much closer to Hong Kong levels now,’ said Simon Smith, a Senior Director at Savills Plc in Hong Kong. Given the limited luxury stock in Singapore to satisfy the demand, “the gap will narrow, and there will be very little daylight between the two markets.” Analysts are forecasting leasing values in Hong Kong to remain flat in the next few months after 2022 saw neighborhoods popular with expats tumble.
Hong Kong has seen a decline in housing demand as expatriates relocated overseas to avoid the city’s pandemic restrictions. That happened just as geopolitical instability was already testing confidence. Areas popular with expats are among the locations with the steepest fall in rents in the past three years.
In Singapore, an acute supply crunch and an influx of wealth has pushed up rents. Locals turned to renting homes due to pandemic-related construction delays, while a months-long wait-out period imposed on owners who wish to sell their private homes and purchase public housing units exacerbated supply shortfalls, said Victoria Garrett, Knight Frank Head of Residential for Asia Pacific.
