Influx of Talent Fuels Hong Kong Leasing Market

• Influx of Mainland professionals and graduates through various talent schemes positively impacts residential leasing market.
• Expatriates returning at a slower pace than expected, with bankers and lawyers from France, Germany, and Australia choosing to reside in high-end areas.
• Kowloon leasing market sees more activity, while New Territories market remains subdued.

Mainland professionals and graduates benefit low-to-mid budget leasing marketing
Hong Kong's residential leasing market is benefitting from an influx of Mainland professionals and graduates seeking homes through various talent schemes. Over 61,000 applications were approved in the first half of the year, with most having a low-to-mid budget of HK$20,000 to HK$40,000. Mainland IT professionals with budgets of HK$40,000 to HK$60,000 are also looking for homes, favouring large housing estates with ample clubhouse facilities, such as Beverly Hill, the Belcher’s and Bel-air.

Expats with high budget are returning slower than expected
Bankers and lawyers from France, Germany, and Australia are returning and choosing to reside in high-end areas such as the Peak and Kowloon Tong with budgets over HK$100,000. However, these expatriates are returning at a slower pace than expected, particularly those from the United States. Therefore, the townhouse market is more muted than in Q1, with more activity on the Peak, favoured by both expats and high-budget Mainlanders.

Demands of Kowloon and New Territories rental market varies
The Kowloon leasing market is seeing more activity, with new housing estates in Kowloon Station and Olympic Station favored by higher-budget Mainlanders. Expats from Japan still prefer to reside in Tsim Sha Tsui. The New Territories leasing market remains subdued, with departing expats not filled by returning ones or newcomers such as Mainlanders. Tung Chung and Tseung Kwan O are two areas that stand out, favored by IT expats mainly from India and both locals and expats (particularly French), respectively.

Flat unemployment rate benefits the serviced apartments market
The unemployment rate in the finance, insurance, real estate, professional, and business services (FIREBS) sector remained flat in June 2023, with a stabilizing overall unemployment rate. Rents for hotel-like and apartment-like units accordingly rose by 0.1% and 1.5%, respectively. Availability is particularly tight in the HK$20,000 to HK$40,000 per month bracket, with most incoming Mainland talents well within that budget band. Meanwhile, premium apartments are maintaining competitive rates to increase occupancy.

Mr. Jack Tong, Director, Research & Consultancy of Savills commented, “Low-to-mid budgets emerge in Q2 with most of them being Mainlanders from the IT sector or via various talent schemes.  Return of expatriates are slower than expected.”

Ms. Aradhana Khemaney, Senior Director, Head of Residential Services of Savills said, “Tung Chung area was favoured by IT expats mainly from India with an ESF International Kindergarten. Tseung Kwan O area, in particular LOHAS Park and residences in O’South were favoured by both locals and expats especially French with newly opened Immigration Tower and French International School within the vicinity.”