Rents for posh apartments slow to 1% in Q2

A number of job losses freed up home stock.

Rental costs for Hong Kong’s luxury apartments slowed from their strong momentum in the first half of the year to a measly 1% in Q2, according to real estate consultant Savills.

Also read: Hong Kong is home to seven in 50 of Asia's multi-millionaires

The volatile stock markets caused by brewing trade tensions between the US and China has resulted in some job losses that seeped over to the luxury residential market. “As a consequence more landlords found themselves with stock on hand and vacancy rose marginally over the period,” Savills noted. 

Also read: Is Kwai Tsing the new home for Hong Kong's upper class? 

Rents for luxury apartments in Kowloon and New Territories outpaced the industry average at 1.4% and 1.1% respectively.

On the other hand, the growth of leasing costs for posh apartments on Hong Kong Island slowed to a mere 0.6% in Q2. Southside/Shouson Hill (2.8%) recorded the largest rental growth in the Hong Kong Island luxury apartment market, followed by Mid-Levels (0.3%).

Rental indices for the townhouse market also slowed from 6% in Q1 to a mere 0.4% in Q2 whilst the serviced apartment also witnessed subdued rental growth at 0.7% in Q2.

The muted rental rises seen in Q2 is expected to extend into Q3, according to Simon Smith of Savills Research.

Photo from Wpcpey - Own work, CC BY 4.0