Hong Kong property agents see expat renters who fled Covid-19 curbs trickling back from cities including Singapore

After experiencing a slowdown in Hong Kong’s residential leasing market for more than two years amid an exodus of expats, property agents say they have observed an uptick in inquiries in recent weeks. Since the Covid-19 pandemic broke out in Hong Kong more than two years ago, Aradhana Khemaney, head of residential services at Savills, has hardly received any inquiries about school placements from her mostly expat clients – a marked change from the 10 to 15 she used to get every month. “Now we are getting several inquiries about school placements,” Khemaney said. “I have two clients who have gone to Singapore because they were worried about the Covid curbs here. They’ve just called me and asked me to find them school places here in Hong Kong because they are coming back.” Her clients have cited visa issues, school placements and relatively expensive flats in Singapore as reasons for their return. “The worst is over for the luxury leasing segment,” said Khemaney. The shift comes as Hong Kong late last month scrapped its mandatory hotel quarantine period, which hindered the ability to travel for business and visit family overseas. Expat parents also fled the city for fear of getting separated from their children, who could be taken away to isolation facilities if they tested positive. Since 2019, rents for upscale homes have retreated by as much as 15.6 per cent. However, leasing transactions for town houses and serviced apartments have climbed by 2.5 and 5.3 per cent, respectively, in the period from July to September, compared with the previous quarter, according to Savills. Luxury rents across Hong Kong also rose between 0.5 and 1.9 per cent in the July to September period from the same period a year ago, the highest uptick the segment has seen since the downturn began in 2019, Savills said. “The luxury leasing segment will continue to improve and will be on an upwards trend,” Khemaney said. “At the moment, we think, next year we will see a 5 per cent growth provided the government opens up even further.” However, returning expats have smaller budgets than they used to, Khemaney said. They are looking for flats renting between HK$50,000 (US$6,370) and HK$100,000 in districts such as the south side of Hong Kong and Mid-Levels – about half of the previous typical budget of between HK$100,000 and HK$200,000, she said. She predicts recovery to pre-pandemic levels will take two years. Vanke Holdings’ serviced apartment property The Luna in Wan Chai, where tenants are mostly employed by multinational companies, has seen its occupancy rate improve to 90 per cent recently, recovering to a normal level following a plunge to 70 per cent, according to Quincy Chow, executive director and deputy general manager of the developer. Signature Homes, the luxury residential leasing arm of Sun Hung Kai Properties, is also seeing expats who went to Singapore returning. “They were our tenants before they went to Singapore, but they told us that it’s actually very expensive to rent a flat in Singapore and difficult to get a seat in international schools,” said Derek Sun, Signature Homes’ managing director. Is Singapore still a ‘tenant’s haven’ as rents rise, Hong Kong expats arrive? Victoria Allan, founder and managing director of Habitat Property, said most of those coming back are single expats or couples that do not have children. “We are seeing a small increase,” she said. “We expect the real increase in demand to start in spring and summer 2023 when all the travel curbs have been lifted.” Renters from mainland China are also contributing to the upswing. “There has been a slight increase, about 10 per cent, in inquiries over the last two weeks,” said KS Koh, chief executive and founder of Landscope Realty, which specialises in high-end properties. “The higher inquiries have come from both expatriates and mainland Chinese, and that is probably because of the easing of curbs.” Most of the inquiries that Landscope has received were for homes in the upscale neighbourhoods of Island South, Mid-Levels and The Peak, where rents typically range between HK$100,000 and HK$300,000 a month, Koh said. Not everyone agrees a recovery wave has arrived just yet. “The enquiries have been staying stable,” said Letizia Casalino, director of real estate at Okay.com. “There was a slight increase in demand, but it remains practically unchanged year on year. Some people came back, but some are still waiting to see if any further relaxation is coming to light. The demand will certainly come back in the near future.” Additional reporting by Pearl Liu and Lam Ka-sing

Hong Kong property agents see expat renters who fled Covid-19 curbs trickling back from cities including Singapore

Agents report an uptick in inquiries after the city’s hotel quarantine requirement was relaxed Some returnees report finding Singapore’s rents higher and its school spots harder to secure than they expected

Agents report an uptick in inquiries after the city’s hotel quarantine requirement was relaxed

Some returnees report finding Singapore’s rents higher and its school spots harder to secure than they expected