Residential rents in Hong Kong are expected to rise in the coming months due to the government’s cooling measures to curb property prices, according to the South China Morning Post.
After rents had already increased by 8.6 percent this year, property consultants predicted that it could increase further by 10 percent by the end of 2010. Figures from the Census and Statistics Department show that rents for private homes increased 1 percent to an 11-month high from June to July.
Potential homebuyers will continue to rent homes while they wait for residential prices to decline, and those who own rental homes will likely continue renting out their properties until rental prices drop. These two factors will likely lead to a decline in supply.
“A growing number of potential homebuyers is waiting on the sidelines and turning to lease instead of buying property. It will drive up leasing demand,” said Buggle Lau Ka-fai, chief analyst at Midland Realty, in an interview.
The Hong Kong government recently announced measures to curb property speculation, including the release of state land for sales to increase supply, and ordering banks to cut loans to luxury homebuyers, from 70 percent down to 60 percent of a property’s value.