| Hong Kong Rental Market |
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The Hong Kong rental market is well supported by expatriates living in Hong Kong. The luxury high-end of the market is particularly vulnerable to the impact of the global financial crisis and slowing economy, due to the importance of the executives working in the finance industry in Hong Kong. Following are points related to the Hong Kong rental market and services offered by Healy Consultants:
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1.
| According to the Global Property Guide, Hong Kong is classed as pro-landlord. Recent changes to the law now allow the landlord to be able to forfeit tenancy contracts after just fifteen days delay of rental payment. Other positive aspects of the Kong Kong rental market in favour of the property owner include:
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i) |
Security deposits are equivalent to two, sometimes three, months rent. |
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ii) |
Rents are freely negotiated in the private sector. |
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iii) |
The landlord can also end tenancy agreement if the tenant uses the premises for immoral or illegal purposes, persistent delay in payment of rent, structural alterations the property without permission. |
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iv) |
It is challenging for tenants to break a lease, unless there is clause in contract between landlord and tenant. |
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2. |
Healy Consultants assists investors to manage the process of finding tenants for newly acquired residential and commercial property. This process includes i) appointing a reliable agent, ii) determining the optimal rental for the property, iii) interviewing potential tenants and supervising negotiation of contracts iv) arranging necessary requirements for collection of rental payments v) efficient resolution of tenant issues. |
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Hong Kong's government is the sole owner of land in Hong Kong. The limited land availability is a contributing factor to Hong Kong property being amongst the most expensive in the world. The rental yields, however, are not the highest within the region. According to the Global Property Guide's index, gross rental yields in Hong Kong are less than 3%. Because of the high cost of property in Hong Kong, investors often have high incomes and are more interested in the potential capital gains, rather than the income stream from rent. |
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4. |
Rental Indices for Hong Kong Property Market Source: Hong Kong Ratings and Valuation Department Figures from the Hong Kong Rating and Valuation Department show an improvement in the Hong Kong rental market compared to the slump in 2009. As indicated in the graph, the latest figures of the rental indices for domestic and commercial sectors indicate an upward trend in rental prices. The office sector in particular has experienced dramatic increases since the end of 2004, significantly faster than the other three sectors. Unlike the domestic, retail and factories indices, the office sector index reached the peak of 1997/98. |
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5.
| The rental market for luxury residentials saw strong growth of approximately 7% in Q1 2010. Positive outlook for the economy and real estate market, along with tight supply in this sector could fuel further growth over the remainder of the year.
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6.
| Hong Kong’s total occupancy cost per workstation per annum is US$16, 970 according to the latest DTZ Global Occupancy Costs Report. Despite occupancy costs throughout Hong Kong declining, Hong Kong remained the second most expensive office location in Asia Pacific. Hong Kong is forecast to outpace Tokyo by 2013. | |||
7.
| The worsening economic environment could see further decline in the rental market. If banks continue to be cautious in their loan-to-value ratios for commercial properties, landlords are likely to offer incentives to attract, and maintain, tenants. | |||
| Contact Us | ||||
For more information on the Hong Kong rental market, call our Hong Kong office at (+852) 8331 1911 or contact email@healyconsultants.com | ||||
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