Research Institute
Author: Number Instein
2021-07-12 08:30
Last update date: 2021-07-12 08:30
Property prices and rents have always been the focus of Hong Kong people. Both landlords and tenants are concerned about the rise and fall of both.
Analyzing the estimates of the Rating and Valuation Department over the years, it is found that the overall property prices and rents in Hong Kong are no longer just rising or falling.
The term of office of Chief Executive Leung Chun-ying was the starting point. In the third quarter of 2012, the property price index of the Department of Estimates was 211.6. By the second quarter of 2017 before his departure, it had risen to 333.2, an increase of 57.5%, reflecting a sharp increase in property prices.
As for Chief Executive Carrie Lam Cheng Yuet-ngor after taking office, the property price index in the third quarter of 2017 was 339.3. From the second quarter of 2018, the index has fluctuated within a narrow range for several consecutive quarters. The latest index in the first quarter of this year was 385.4, an increase of 13.6%.
However, the property price index includes the prices of various types of units such as luxury homes. Therefore, the average price per square foot trend of small units (430 to 752 square feet) in the Kowloon area is selected for analysis.
Comparing Leung Chun-ying and Lam Cheng Yuet-ngor's tenure as the starting point, calculating the average price per square foot change in the Kowloon area shows that property prices in this area have risen by 37% during Leung Chun-ying's tenure; while Carrie Lam's property prices in the same area have risen by 26% so far.
Private building rent
As for rents, according to the Private Property Rent Index of the Department of Valuation, the index rose from 146.2 in the third quarter of 2012 to 181.5 in the second quarter of 2017, an increase of 24.1% during the tenure of former Chief Executive Leung Chun-ying.
As for Carrie Lam since taking office, the rent index has not risen but fallen by 5.7%. The rent index has rebounded after a slight decline in the third quarter of 2018, and continued to fall after reaching a new high in the third quarter of 2019, returning to the level of early 2017.
When analysing rent trends, we also use the trend of average unit price per square foot in the Kowloon area for analysis, and use the terms of the two chief executives as the starting point for calculation.
During Leung Chun-ying's tenure, rents in the area have risen by 52%, while Carrie Lam's rent has risen by only 4% so far.
It is worth noting that whether it is property prices or rents, we must also consider the impact of Hong Kong’s experience of the new crown pneumonia epidemic since 2020, and even the impact of social movements in 2019.
In addition, there are many factors that affect the property prices of individual districts and housing estates, and the DPA index may not be able to fully reflect them.
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