FIRST PACIFIC Davis: The residential rental market in Hong Kong showed a strong overall activity in November, with stable demand across all price ranges.

The Hong Kong residential leasing market report released by FIRST PACIFIC Davis pointed out that the residential leasing market in Hong Kong was active in November, with steady demand across all price ranges. Transactions for units with monthly rents below HK$100,000 in Mid-Levels significantly increased, while the high-end sector focused on new luxury homes with monthly rents of over HK$100,000, large areas, and high-end facilities. Mainland affluent tenants have become the main drivers of the high-end market, leading to a tightening supply of premium rental properties in Mid-Levels and The Peak. Meanwhile, corporate tenants and young professionals prefer areas with high cost-effectiveness like West Kowloon and Discovery Bay, while family tenants focus on properties in Mid-Levels for their convenience. Emerging areas like Kai Tak also attract mainland tenants who are sensitive to prices due to the completion of new private residential estates. With tight supply and diverse demand, the market is expected to continue to develop steadily. Tight supply in high-end leasing: Mainland affluent tenants are increasingly favoring high-quality projects in Mid-Levels, especially Yung Man and Yale Residence, leading to a tight supply of quality units and driving rental performance in Mid-Levels and The Peak. Distinct tenant segmentation: Corporate tenants and young professionals with budgets of HK$30,000-60,000 prefer West Kowloon and Discovery Bay; family tenants with budgets of HK$60,000-80,000 focus on projects in Mid-Levels for their convenience. Rising demand in emerging areas: Regions like Kai Tak attract mainland tenants who are sensitive to prices due to the completion of new private residential estates with well-equipped clubhouses and shopping centers. Dependence on institutional owners for supply: With property prices stabilizing, owners are reclaiming rental units for sale, and the market supply mainly relies on developer projects, such as Central One Central Place, which has strong demand due to its prime location and flexible leases. Steady demand for serviced apartments: Benefiting from the active Hong Kong IPO market, mainland investment bankers have a continuous demand for short-term accommodation, with budgets of HK$30,000-40,000 in Central, HK$20,000-30,000 in Western District and Sheung Wan. Terence Tang, Director of Research and Consultancy at FIRST PACIFIC Davis, stated that the Hong Kong residential leasing market was active in the third quarter due to mainland affluent tenants seeking quality properties. The limited supply of prime locations contrasts with the growing demand for high cost-effective areas. The serviced apartment sector remained stable, driven mainly by the short-term accommodation needs of mainland professionals coming to Hong Kong for IPO applications. Bao Fang Li, Director of the Hong Kong Residential Services Department at FIRST PACIFIC Davis, pointed out that the focus of mainland affluent tenants on high-end properties, combined with the stable support from corporate tenants and young families for the mid-range market, has created diverse dynamics in the market. Tight supply and prime locations will continue to support rental performance in core areas, while emerging areas will provide attractive choices for budget-restricted tenants. Rental indices in all areas have increased, with luxury homes in the New Territories growing by 3.7% quarter-on-quarter.