Asia is going through a really tragic period. Because of the coronavirus, so much so that, in Hong Kong, real estate has reached an all-time low. Unfortunately (for the sellers) and fortunately, for the potentially interested parties, the rental market in Hong Kong seems to be experiencing a full crisis. The worst since 2018. Why this collapse has affected Hong Kong? Why has it come to devalue the rental prices so much? In order to solve these questions, which are afflicting not a few investors, we have drawn up this mini guide. We will try to understand both the extent and the scale of the phenomenon. So, if you are curious and ready to find out more, all we have to do is start our new column today!
The so-called ”rental market” is in decline. This is not just a popular belief, emphasized by the propagation of the coronavirus. In fact, although prices have increased by 1% from the beginning of January 2020 to the beginning of February, the local media have no doubt. The rental market in Hong Kong is in a loss. So much so that many people are leaving the city and the owners themselves are lowering their rents even further. (even by 20%).
As a practical example, in the ”new territories” region, in Yuen Long , an average apartment is sold for 13% less than the original price. And we are talking about buying and selling contracts. Let alone a lease contract, which, even more flexible in nature, strangely fails to win the hearts of potential investors. The situation seems rather worrying, given that the phenomenon is not exclusively coronavirus-induced. There are many causes.
For a long time, prices in Hong Kong have been characterised by a sharp rise. As a result of the unexpected demand from a large number of new workers, who have entered the market in recent years, the Hong Kong market had seen a very sharp rise in prices. Unfortunately, however, international tensions with the United States and the climate of economic uncertainty, which has been consolidated since 2018, have only prevented any form of potential investment.
The rental market was the only driving force behind the real estate market, but it seems that it is also currently at a standstill. The situation, as we said in the previous guide, is worrying. People with families and children prefer to move to a secondary market . Moving transactions to the West in order to obtain safer investments. It is also noticeable that a great many owners have been forced to devalue as much as one million Hong Kong dollars. (figure recorded already at the beginning of the week).
Other owners, moreover, do not want to be subjected to this fall in prices, opting to wait for better times.
The best solution? It will probably not be known until later. For now, we will try to stay updated on the phenomenon !
Read also: Property for sale Hong Kong
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