Jun 27, 2024 03:49 AM
ECONOMY
Hong Kong’s Talent Pass Scheme Drives Up Housing Rents
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A public housing complex in Hong Kong.
Hong Kong’s home prices are falling once again despite the easing of control measures, but a surge in demand for lettings is driving rents to new highs in one of the most expensive cities in the world.
The private residential rental index increased 1.02% month-on-month in May, the Hong Kong Special Administrative Region’s Rating and Valuation Department reported Wednesday. This marks the third successive month of increases, with a cumulative rise of 2.49% since March, the highest level since January 2020.
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- Hong Kong's home prices are falling, with a 1.2% drop in May and a 12.7% year-on-year decrease, despite initial rises post-control measure abolishment.
- The rental market is surging, with rents up 1.02% in May and a cumulative 2.49% rise since March, driven by high demand and the talent pass scheme.
- The talent pass scheme has attracted 180,000 professionals by May, surpassing the annual target of 35,000; rental returns may prompt renters to buy, supporting home prices.
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Who’s Who
- Centaline Property Agency Ltd.
- Centaline Property Agency Ltd. is a prominent real estate agency in Hong Kong. Louis Chan, the CEO of its residential unit, attributes the recent surge in rental prices to the talent pass scheme aimed at attracting professionals. He anticipates the rental upward trend to continue, especially during the summer rental season.
- Knight Frank Greater China
- Martin Wong is the head of research & consultancy at Knight Frank Greater China. He commented that the top talent pass scheme has increased the working population and high-income earners in Hong Kong, predicting a 5% to 8% increase in the 2024 rental index.
- Cushman & Wakefield
- Cushman & Wakefield is a global real estate services firm. Senior Director of Valuation and Advisory, Edgar Lai, predicts that rising rental returns in the pre-owned residential market in Hong Kong could exceed 3.5%, attracting investors to buy homes and potentially stabilizing home prices.
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What Happened When
- January 2020：
- Highest level of cumulative rise in private residential rental index before recent increases.
- 2022：
- Hong Kong launched the talent pass scheme to attract skilled professionals.
- February 2024：
- Property market controls were abolished in Hong Kong.
- March 2024：
- Home prices initially rose slightly after the abolition of property market controls.
- March 2024：
- New home sales surged to 4,200 units, the highest monthly figure since 1998.
- April 2024：
- Home prices continued to rise slightly before falling sharply in May 2024.
- April 2024：
- New home sales dropped to 1,848 units.
- May 2024：
- Private residential rental index increased 1.02% month-on-month, marking the third successive month of increases.
- May 2024：
- Price index for pre-owned homes fell to 305.9 points, a 1.2% decrease from April 2024 and a 12.7% year-on-year drop.
- May 2024：
- New home sales further dropped to 1,386 units and pre-owned housing market saw 2,938 units sold, down from 4,341 units in April 2024.
- By the end of May 2024：
- Hong Kong had attracted 180,000 professionals, surpassing the target of 35,000 people a year.
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