In a nutshell, it was quiet on the Hong Kong rental front during Q1 with seasonal factors and jumpy financial markets to blame for little rental movement. 

At a glance: 

• Residential leasing enquiries over the first three months of 2019 were again dominated by locals rather than expats or mainlanders 
• Townhouse rents posted growth of 4% while luxury apartment rents rose minimally   
• Shatin/Tai Po rents were up by 1.1% during Q1, becoming popular locations for renters due to new developments  
• Demand from local tenants is strong, and extended four to six-year leases 

Kowloon was the standout as it’s shaping up to be a more desirable option, particularly for younger expats, with newer stock, better connections and trendier neighbourhoods contributing to the area’s appeal. But despite this, rents in Tsim Sha Tsui/ Hung Hom and Ho Man Tin/Kowloon Tong dropped by 0.4% and 1.3% respectively in Q1.

The first quarter of the year was dominated by minute movements in rents. Demand generally remained sturdy, but for those on a budget, this meant there was little interest above HK$140,000 per month.

January and February are traditionally quiet months in the leasing market and enquiries were weighed towards locals rather than expats or mainlanders. 

Luxury apartment rentals on Hong Kong Island and in the New Territories were up by 1% and 0.5% respectively, while over in Kowloon it dropped by 0.5%. 

"The first quarter presented a mixed picture with muted tenant demand and landlords preferring to leave rents unchanged on renewal,” according to Savills Research (SR) Senior Director Asia Pacific, Simon Smith.

Town house 

The townhouse market recorded its largest rental increase since the same time last year, posting 4% growth. 

From January to Mach, SR encountered high movements for low to mid-end budgets of HK$50,000 to HK$80,000 per month.  

Landlords erred on the side of caution, preferring to leave rents undisturbed.  

Townhouse rents put on a strong display as rents in The Peak and Southside districts were up by 3.1% and 4.5% respectively, SR believe this is due to a lack of choice above HK$200,000 per month where few units are available for rent. 

It's believed many tenants are now locals, and SR have noticed an increase of four or even six-year leases.  

So, what do tenants look for in a townhouse?  

“Views, building quality, facilities and outdoor space are all highly valued,” the survey stated.  

“Serviced apartment rents remained unchanged over the quarter while we found that the FIREBS unemployment rate nudged up slightly but remained at a very low level (2.0%).” 

Over the harbour  

On the other side of the harbour, the Sai Kung market recorded a fall of 0.6% over the quarter. SR said that many prospective tenants feel that there is no viability in moving. This can be compared to Discovery Bay and Tung Chung which are becoming more expensive, particularly at the lower end where apartments for below HK$15,000 per month are scarce.  

On the rise  

Projects which obtained their Occupational Permits in 2018 are now open for lease, like Victoria Harbour Residence (140 units) in North Point, The Mercury (99 units) in Tin Hau and 1 Oi Tak Street (75 units) in Shau Kei Wan.  

New establishments this year include Rosewood Residences (186 units) and K11 ARTUS (287 units) in Victoria Dockside, Tsim Sha Tsui. Rosewood occupants Residences will be located on the top 19 floors of a luxury hotel.  

The Rosewood Hong Kong which was opened in March, offer unit types ranging from studio to two-bedrooms, while K11 ARTUS will be a mid-rise, 14-storey block within Victoria Dockside, scheduled to open in the summer of 2019. 

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