The leasing market looks set to endure more fluctuations and disparities with the diversified tenant profile and inter-district movements shifting market dynamics among different segments, according to Savills in its Market in Minutes – Hong Kong Residential Leasing report of September 2024.

Intra and inter-relocations occurs
In Q2 2024, the residential leasing market in Hong Kong experienced notable shifts, particularly in the Southside area. The surge in relocations was largely driven by extensive renovations at the Pacific View development, prompting both local residents and expatriates to seek alternative leasing options such as 127 Repulse Bay Road, The Lily, and The Repulse Bay, with budgets ranging from HK$80,000 to HK$100,000.

Additionally, long-term tenants from the Mid-Levels district have also been forced to relocate due to stratification in certain developments, favouring the Southside for larger apartments and enhanced views within the similar budgets.

Expatriate professionals return with reduced budgets
The banking industry has started to see a gradual return of expatriate professionals, primarily at the management level. However, their budgets have significantly diminished, dropping from the pre-COVID range of HK$80,000 to HK$100,000 to current figures between HK$30,000 and HK$50,000, reflecting a cautious outlook on short-term business prospects. New arrivals from Europe, India, and Southeast Asia are typically on 2 to 3-year contracts.

Emerging trends in Mainland talent housing preferences
Mainland talents working in wealth management and related fields are also shifting their focus, with mid-range budgets of around HK$20,000 to HK$40,000. They prefer new developments on the Kowloon side, particularly between Kowloon and Nam Cheong station. Additionally, there is a cohort of Mainland newcomers on 1 to 3-month contracts who are more likely to reside in flexible accommodations, such as co-living spaces managed by Weave Living or Townplace in SOHO, Kennedy Town, and Cheung Sha Wan.

Mr. Jack Tong, Director, Research & Consultancy of Savills commented, “Some intra and inter-district relocations are noted in Q2 with traditional leasing stock being either renovated or stratified, while newcomers favouring emerging districts across the harbour with newer developments.”

Ms. Sdever Li, Director, Residential Services of Savills said, “The serviced apartment market, facing competition from both leasing and co-living products, experienced a slightly challenging quarter. However, demand remained solid, with low to mid-budget Mainland talents continuing to arrive. Many landlords opted to forgo rental increments in an effort to boost occupancy rates, which have hovered around 70% since the start of the year.”

Download Market in Minutes – Hong Kong Residential Leasing report here.

For further information, please contact Jack Tong, Director, Research & Consultancy of Savills and Sdever Li, Director, Residential Services of Savills as the details below.