Knight Frank Report: Global Top 15 luxury property market rental prices increased by 2.8% year-on-year in the first quarter, with Hong Kong ranking fifth.

Knight Frank has recently released the Global Prime Rental Index for the first quarter of 2026, reporting on the latest trends in 15 major luxury rental markets worldwide. In the first quarter, global prime rents rose by approximately 2.8% annually, a slight narrowing compared to the approximately 3% increase in the fourth quarter of 2025. This reflects the gradual end of the rapid growth cycle in luxury rents post-pandemic, with the market returning to a more stable and sustainable pace of growth. Among them, the luxury rental market in Hong Kong ranked fifth, with an annual increase of about 4.2%. The report states that Sydney is the strongest performing rental market globally, with prime rents increasing by approximately 10.6% annually, and also rising by about 5.3% quarterly, reflecting strong demand and limited supply in the market. Other markets performing well include New York and Tokyo, ranking second and third, with prime rents increasing by approximately 7.4% and 7.2% annually in the first quarter of this year, followed closely by Melbourne at around 5.4% annual growth. However, the bank points out that after adjusting for inflation, the continued slowdown in global luxury rental growth, with annual growth dropping from approximately 1% in the fourth quarter of last year to only around 0.5% this quarter, reflects the difficulty for landlords to achieve rental growth above inflation. Liam Bailey, head of global research at Knight Frank, pointed out that the global luxury rental market has largely completed its period of rent adjustment post-pandemic, and has not yet entered a downward phase. Although the overall rental growth rate has slowed down, the market performance is increasingly divergent, with luxury supply remaining tight and strong demand from high-income tenants leading to significant rent increases, while rental growth in other regions is somewhat limited. Liu Wenhua, senior director and head of residential property agency at the bank, added that the luxury rental market in Hong Kong continues to show steady performance, with rental growth in the first quarter of 2026 being one of the top five fastest-growing markets globally. The significant increase in rents is mainly driven by the continual demand from high net worth individuals, expatriate professionals, and corporate executives for luxury homes, coupled with limited supply, providing support to the market. Looking ahead, factors such as talent inflow, corporate leasing demand, and residential supply will continue to be key drivers of market performance and ongoing support for the luxury rental market.