Luxury apartment rents on Hong Kong dropped by 2.6 percent in the quarter ending June 2014, according to the latest research report from Savills.
It noted one contributing factor was weakening demand from the financial sector.
Townhouse rents fell more heavily, by 3.7 percent in Q2, alongside rising vacancy rates.
Properties in the HK$40,000 to HK$60,000 per month range are the most active, according to the real estate firm, while other budget bands are quiet.
Kowloon continued to enjoy a ‘flight to value’ and rents in the area rose marginally over the quarter against trend.
As international banks continue to consolidate, this is having a knock-on effect on the upper end of the leasing market, it reported.
Demand for temporary accommodation weakened alongside slow hiring. Hotel-like and apartment-like serviced apartment rents fell by 0.2 percent and 1.1 percent in Q2 2014 respectively.
"Rents in Kowloon and the mid-market have continued to rise as high-end/townhouse rents on the island have softened,” said Simon Smith of Savills Research
“We maintain our forecast of a 15 percent drop in luxury apartment rents over 2014 as a whole, with townhouse rents slipping by 20 percent,” the research concluded.
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Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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