Rental costs in Hong Kong, home to some of the most expensive real estate in the world, dropped to their lowest level in five years over the first quarter of 2021, research from Centaline Property Agency showed.
Average price per square foot hit HK$33.60 ($4.33) in Q1, down from a peak of HK$40.32 two years ago, as many expatriates and local residents look abroad following years of protests and the ongoing pandemic.
Rent fell around 25% on average last year in the Mid-Levels and Deep Water Bay neighborhoods populated in the past by expatriate families and rich mainlanders.
Demand from foreign students and young professionals, who favor Sheung Wan’s SoHo district, has also dwindled with prices falling 20% on average in the last year.
Rental yields declined to their lowest point on record in February, government data showed.
Unemployment and a declining population have not helped matters. The city’s population shrank 0.6% and a further contraction is likely after more than 27,000 Hong Kongers lodged applications this year to relocate to Britain.
Despite economic activity largely returning to normal in Hong Kong, 6.8% of residents remain unemployed as of March — just shy of the 17 year record high set the previous quarter.
To be sure, there are outliers. In March, someone signed a lease agreement for HK$1.35 million per month for a mansion at the city’s luxurious Peak district, home to celebrities and billionaires.
Hong Kong is not the only once-expensive housing market feeling the strain from more than a year of pandemic lockdowns. Rental values in New York fell 14% over the past year and in London, rent prices dropped 8.1%, according to Bloomberg data.
