Hong Kong

    Property agencies in Hong Kong have seen an increase in enquiries in recent months, after witnessing a slump in the residential leasing market for more than two years due to an exodus of expatriates.

    Aradhana Khemaney, head of residential services at Savills, says that since the Covid-19 outbreak broke out in Hong Kong over two years ago, she has gotten very few queries from her largely expat customers for school placements, down from 10 to 15 per month before.

    Khemaney remarked, “Now we are receiving a number of questions for school placements.” Two of my customers, concerned about the Covid restrictions in our country, have already relocated to Singapore. My parents recently phoned and requested me to look at schools in Hong Kong for their upcoming return.

    Many of her customers who have returned to Singapore have done so because of difficulties with visas, finding suitable schools, or affording housing there.


    The Worst might be Over for Luxury Leasing

    Late last month, Hong Kong lifted its mandated hotel quarantine period, which has made international business trips and visits to family members more difficult. Concerned that their children may be hauled away to isolation centers if they tested positive, many expat parents also departed the city.

    Premium apartment rentals have dropped by as much as 15.6% since the beginning of the year.

    However, Savills reports that townhouse leasing transactions increased by 2.5 percent and serviced apartment leasing transactions increased by 5.3 percent from July to September.

    In addition, Savills said that from July to September, luxury rentals in Hong Kong increased by between 0.5 and 1.9 percent compared to the same time a year before. This was the largest annual increase for the luxury rental market since the downturn started in 2019.

    Singapore’s population decline has stopped, whereas the outflow from Hong Kong continues.

    According to Khemaney, “the luxury leasing category will continue to develop and remain on an upward trend.” We anticipate 5% growth next year if the government opens up even more.

    Khemaney, however, said that expatriates now have less expenditures than they formerly had. She said that this is around half of the former normal budget of between HK$100,000 and HK$200,000, and that they are searching for apartments renting for between HK$50,000 (US$6,370) and HK$100,000 in areas like the south side of Hong Kong and Mid-Levels.

    Getting back to where we were before the epidemic would take two years, according to her estimates.
    According to Quincy Chow, executive director and deputy general manager of developer Vanke Holdings, the occupancy rate at The Luna serviced apartment property in Wan Chai, where tenants are primarily employed by multinational companies, has recently improved to 90%, recovering to a normal level following a plunge to 70%.


    More Expats Returning to Singapore as Singapore Open Borders

    Expats are returning to Singapore, according to Signature Homes, the premium residential leasing subsidiary of Sun Hung Kai Properties. Managing Director Derek Sun of Signature Homes stated, “They were our tenants before they moved to Singapore, and they informed us that it’s really quite costly to rent a property in Singapore and difficult to secure a seat in foreign schools.”

    According to Habitat Property’s founder and MD Victoria Allan, the majority of returnees are either childless singles or childless couples.

    We are witnessing a little rise,” she added. We anticipate a significant uptick in demand beginning in the spring and summer of 2023, after all travel restrictions have been eliminated.


    More Influx of Expats from Mainland China

    A 10% rise in enquiries has been seen over the last two weeks, according to Landscope Realty CEO KS Koh. Landscope Realty focuses on luxury homes. The loosening of restrictions has led to an increase in interest from both overseas Chinese and mainland Chinese.

    Landscope has received the majority of its queries for properties in the high-end Island South, Mid-Levels, and The Peak areas, where monthly rentals average between HK$100,000 and HK$300,000.

    However, not everyone is certain the upswing has begun. “The inquiries have been holding steady,” Letizia Casalino, director of real estate at Okay.com, said. It’s true that demand went up a little bit, but it’s been going up and down pretty much every year. Some individuals returned, while others are still waiting to see whether further easing is forthcoming. The need will return in the not-too-distant future.