Hong Kong rental market heats up while Singapore boom cools

10 months ago 85

SINGAPORE/ HONG KONG - Hong Kong housing rents are rising again as overseas workers return, a recovery that contrasts with the cooling market in rival financial hub Singapore.

Hong Kong rents rebounded from their first-quarter decline to climb 2.8 per cent in the second quarter of 2023, Knight Frank data show. While Singapore recorded the same pace of gains, growth in the latter city’s rents was the weakest since 2021 and down from a recent peak rate of 8.6 per cent.

The push to reverse a brain drain of talent during the pandemic is encouraging new arrivals to target Hong Kong neighbourhoods popular with professionals, such as Soho and Kennedy Town. In comparable districts in Singapore, growth rates are now about half that as stellar figures from previous years give way to relatively lacklustre increases.

The contrast in performance between rental markets in two of Asia’s prime financial hubs underscores Hong Kong’s path to recovery from the pandemic as people from overseas flow back into the city. Meantime, in Singapore, policy measures ahead of an election to tackle soaring property prices are starting to work.

“The trend is poised to persist, with Hong Kong’s rental market rebound affirming its resilience as a financial hub,” said Christine Li, head of research for Asia Pacific at Knight Frank. “Singapore’s decelerating rental market may offer relief to expatriates previously deterred by escalating rents.”

Hong Kong rents remain on average about 9 per cent more expensive than Singapore’s, according to Knight Frank data. Hong Kong’s seen its strongest rental market since July 2018, said James Fisher, chief operating officer at real estate platform Spacious.hk, who expects rents to rise another 2 per cent to 3 per cent by the end of this year. Bloomberg Intelligence forecasts vacancy rates in residential units there to fall by December.

“When there is not ju...

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