• Townhouse rents recorded a strong 4.0% growth while luxury apartment rents saw only very muted rises
• Newer stock, better connections and trendier neighbourhoods add to Kowloon’s appeal
• Residential leasing enquiries over Q1 were again dominated by locals rather than expats or mainlanders
Hong Kong - 25 April 2019 Prominent real estate advisor Savills observed that Q1 was characterised by small movements in rents. The robust townhouse market recorded its largest rental increase (+4.0%) since Q1/2018, while luxury apartment rents were up on Hong Kong Island (+1.0%) and in the New Territories (+0.5%) but fell in Kowloon (-0.5%). Locals still dominated residential leasing enquiries. In terms of new supply, Rosewood Residences and K11 ARTUS in Victoria Dockside, Tsim Sha Tsui will be serviced apartment projects to watch this year.
During January and February, the traditionally quiet months, demand generally remained healthy, but budget constraints were still noticeable with little interest above HK$140,000 per month. Over the first three months, we noted high activity levels for low to mid-end budgets of HK$50,000 to HK$80,000 per month with a focus on Mid-Levels and Southside.
Looking at the island market, the Peak (+2.9%) recorded the highest rental increment, followed by Happy Valley/Jardine’s Lookout (+2.1%), Mid-Levels (+1.1%) and Pokfulam (+0.3%); but Southside/Shouson Hill saw the first fall in rents since Q4/2015 (-0.8%). Thanks to new developments such as Dragons Range, Providence Bay and Mayfair By The Sea, Shatin/Tai Po rents rose by 1.1% during Q1, becoming popular locations for renters.
Major new supply in 2019 will include Rosewood Residences (186 units) and K11 ARTUS (287 units) in Victoria Dockside, both of which are serviced apartment projects.
Ms. Edina Wong, Senior Director, Residential Services said: “Little substantial rental movement was recorded over Q1 as seasonal factors alongside jumpy financial markets kept new demand in check. We also noticed that Kowloon is beginning to feature more as an option, particularly for younger expats. Overall, newer stock, better connections and trendier neighbourhoods are all contributing to the area’s appeal.”
Mr. Simon Smith, Senior Director, Research & Consultancy commented: “The first quarter presented a mixed picture with muted tenant demand and landlords preferring to leave rents unchanged on renewal.”