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HONG KONG: Residential rents have remained firm despite a big increase in flats available for lease since the government introduced cooling measures to curb property speculation at the end of November.
"Many investors responded to the increase in stamp duties on short-term re-sales of properties of 5% to 10% depending on the holding period by withdrawing their flats from sale and choosing to lease them instead," said Angus Chan, a sales manager at Centaline Property Agency in Sha Tin.
As a result, housing estates in the New Territories such as City One Shatin and Kingswood Villas in Tin Shui Wai, which were popular with investors last year, recorded a sharp increase in the supply of flats for lease.
Centaline estimates that the number of flats available for lease in City One Shatin has increased to 170 from around 80 to 90 flats before the government imposed the additional stamp duties.
However, rents have not decreased even though the supply has gone up significantly. "This is because demand from tenants is very strong at a time when many home seekers are waiting for a fall in property prices before they buy," Chan said, noting that the number of leasing transactions at the estate grew 11.5% to 116 deals last month.
But the average price of a flat in City One Shatin has now risen to HK$5,292 (RM2,089.32) per square foot from HK$5,180 per sq ft before the cooling measures.
Jack Wong, a sales manager for Centaline in Tin Shui Wai said the number of flats in Kingswood Villas available for lease had increased to 200 from about 130 in November.
Many investors who had planned to resell their flats in the short term had changed their strategy because of the new stamp duties.
"Now they would rather lease the flats to generate rental income. The rental yield is about 4%, which is attractive to investors," he said.
"A total of 80 leasing transactions were recorded in the estate in the first three weeks of December, much higher than the 34 deals for the whole of November," Wong said. Rents in the estate stayed firm in a range of between HK$10 and HK$11 per sq ft.
Chan of Centaline said he expected the supply of leasing flats would continue to increase this year.
"Investors who bought flats last year will be reluctant to resell quickly to avoid paying the additional stamp duty. They would rather to keep their flats for leasing," he said.
At the same time, the demand for leasing flats would remain strong as the increasing property prices would continue to scare off many home seekers.
He believed rents at City One Shatin would be flat this year.
Patrick Chow, head of research at Ricacorp Properties, said the average rent in major housing estates rose about 14% last year, while property prices jumped 17%.
"Rents may rise a further 3% to 5% in the first half as the supply has increased," Chow said.
"But we will see a sharp increase in rents in the second half following inflation.
"I believe rents will jump 10% in the second half," he said. — SCMP
"Many investors responded to the increase in stamp duties on short-term re-sales of properties of 5% to 10% depending on the holding period by withdrawing their flats from sale and choosing to lease them instead," said Angus Chan, a sales manager at Centaline Property Agency in Sha Tin.
As a result, housing estates in the New Territories such as City One Shatin and Kingswood Villas in Tin Shui Wai, which were popular with investors last year, recorded a sharp increase in the supply of flats for lease.
Centaline estimates that the number of flats available for lease in City One Shatin has increased to 170 from around 80 to 90 flats before the government imposed the additional stamp duties.
However, rents have not decreased even though the supply has gone up significantly. "This is because demand from tenants is very strong at a time when many home seekers are waiting for a fall in property prices before they buy," Chan said, noting that the number of leasing transactions at the estate grew 11.5% to 116 deals last month.
But the average price of a flat in City One Shatin has now risen to HK$5,292 (RM2,089.32) per square foot from HK$5,180 per sq ft before the cooling measures.
Jack Wong, a sales manager for Centaline in Tin Shui Wai said the number of flats in Kingswood Villas available for lease had increased to 200 from about 130 in November.
Many investors who had planned to resell their flats in the short term had changed their strategy because of the new stamp duties.
"Now they would rather lease the flats to generate rental income. The rental yield is about 4%, which is attractive to investors," he said.
"A total of 80 leasing transactions were recorded in the estate in the first three weeks of December, much higher than the 34 deals for the whole of November," Wong said. Rents in the estate stayed firm in a range of between HK$10 and HK$11 per sq ft.
Chan of Centaline said he expected the supply of leasing flats would continue to increase this year.
"Investors who bought flats last year will be reluctant to resell quickly to avoid paying the additional stamp duty. They would rather to keep their flats for leasing," he said.
At the same time, the demand for leasing flats would remain strong as the increasing property prices would continue to scare off many home seekers.
He believed rents at City One Shatin would be flat this year.
Patrick Chow, head of research at Ricacorp Properties, said the average rent in major housing estates rose about 14% last year, while property prices jumped 17%.
"Rents may rise a further 3% to 5% in the first half as the supply has increased," Chow said.
"But we will see a sharp increase in rents in the second half following inflation.
"I believe rents will jump 10% in the second half," he said. — SCMP
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