Everything you need to know about Hong Kong’s luxury leasing market right now

Single executives and young couples, not families, are driving demand.

Luxury residential rents on Hong Kong Island inched up 1%, while rents in Kowloon and the New Territories slipped 0.1% and 0.8%, respectively, in Q3 2021. Families seem to have stepped aside and younger single executives or couples without children drove strong demand during the quarter.  

“We have also seen many more French families arriving recently. Usually working in finance and on budgets of HK$60,000 to HK$100,000 per month, they prefer Southside or Clearwater Bay/Sai Kung. Their district preferences are explained by the fact that French schools are located in Jardine’s Lookout, Happy Valley and Tseung Kwan O,” Savills says.

Here’s more from Savills:

All districts on Hong Kong Island recorded moderate rental increments in Q3/2021, with Southside (1.4%) registering the largest rise, followed by Happy Valley/ Jardine’s Lookout (1.2%) and Pokfulam (0.9%). Hong Kong’s IPO pipeline remains healthy, the unemployment rate in the financing, insurance, real estate, professional and business services industry fell to a one-year low of 3.7% in August, while Central office vacancy stabilised; all factors behind the slight rise in residential rents on the island. 

The luxury apartment market on Hong Kong Island is facing very limited availability and this is especially true for budgets of HK$70,000 per month plus in Mid-levels, while Pokfulam also remains tight. With more singles and young couples looking for apartments, accommodation on the island has again become an option for many with Kennedy Town attracting a lot of interest for its new stock of buildings and its vibrant bar and restaurant scene. 

In Kowloon and the New Territories, Ho Man Tin/Kowloon Tong are proving particularly popular among locals and Mainlanders. As an upmarket residential submarket in central Kowloon, the area offers not only a peaceful ambience, but also incredibly convenient access to vibrant neighbourhoods like Mongkok and Yau Ma Tei. The fact that the district has one of the best school networks in Hong Kong including La Salle College and Diocesan Boy’s School, never fails to attract locals and Mainlanders at the beginning of each academic year. 

All submarkets in Kowloon and the New Territories recorded slight rental declines except Ho Man Tin/ Kowloon Tong (+0.8%) and Sha Tin/Tai Po (+0.2%) while submarkets remained strong along the new Tuen Ma Line which links East Kowloon and the New Territories. Discovery Bay (-2.2%) saw the largest rental decline among the submarkets in Kowloon and the New Territories, followed by the New Territories (-0.8%) and Tsim Sha Tsui/ Hung Hom (-0.5%). In Kowloon and the New Territories, luxury leasing markets have remained weak with fewer expat family arrivals and therefore lower demand for areas close to international schools. We also note that many families chose to leave Hong Kong after the end of the school term in June/July although exact figures are hard to come by.