Luxury home rents to fall 10% by next year

Impact of cooling measures kicking in.

According to a release, as the latest cooling measures will slow the sales activity of luxury residential properties further and are likely to lead to a price correction, Colliers projects luxury residential prices to decrease by an average of 10% in the next 12 months.

With the demand-side cooling measures in place, some prospective buyers remain on the sidelines, while some of them may resort to the leasing market. 

The leasing market on the other hand has experienced a rising demand for units of smaller sizes in 1Q 2013 due to increasing local leasing demand, continued rise in the number of junior-level expatriates arriving in Hong Kong and lowered housing allowances in both financial and non financial enterprises.

Besides, tenants whose housing budgets have been trimmed opted to downsize their units or relocate to residential districts of lower rental level. As a result, the rental in mass residential leasing sector saw an upward adjustment pressure.