Consultancy's Lowered Projection Occurs During Talk Of Global Economic Slowdown #
Hong Kong has some of the highest rent prices in the world.
According to a recent South China Morning Post report, property consulting firm Jones Lang LaSalle has downgraded its prediction for this year's Hong Kong's luxury apartment rent increase rate from 4 percent to 2 percent, with the slowing global economy a possible factor in decreased demand.
The consultancy's adjustment came after luxury rents dropped in the first quarter by 1.2 percent (quarter on quarter). However, the firm projects mass-market apartment rents to have a much higher rate of increase with a range of 5 to 10 percent.
The numbers have been spurred in part by cuts to housing allowances for expatriates as a result of an economic slowdown. Residents' subsequent downgrades from luxury to more mid-range options are expected to contribute to the higher rate for the latter market.
Over the years, the Hong Kong government has implemented several measures to cool its housing market. In October, it doubled the sales tax on high-end luxury apartments for non-permanent residents to stave off fears of a housing bubble, and its efforts appear to have finally started having an effect on housing prices.
Mainland Chinese buyers have been blamed in the past for driving up property prices, reportedly accounting for the sale of 25 to 40 percent of new luxury apartments in Hong Kong. The mainland government’s efforts to curb the purchase of multiple homes has encouraged more buying in Hong Kong, which may have been a factor in the Hong Kong government's new policies.