2025-09-19 易发睇楼团
Hong Kong’s rental market has been heating up recently, driven by an influx of mainland students and skilled professionals, which has significantly boosted rental demand. As a result, rents have reached record highs. According to the latest Centa-City Rental Index (CRI), the index stands at 129.57 points, up by 1.1% compared to the previous month. This marks the fourth consecutive monthly increase, accumulating a total rise of 4.7%. The index has surpassed its 2018 peak and set new historical highs for two straight months.
Despite the recent sharp rise in interbank rates, many housing estates still exhibit a “cheaper to own than rent” phenomenon, particularly in the affordable housing segment. Following the latest interest rate cuts, Centaline Property's statistics show that, out of the 143 housing estates included in the rental index, 94 of them (or 65%) currently offer rental yields exceeding the current HIBOR-linked mortgage interest rate of 3.375%.
In July, 34 housing estates recorded rental yields of 4% or higher, an increase of 4 estates compared to June and more than double the number (15 estates) recorded during the same period last year. Topping the list is Tak Bo Garden in Kowloon Bay, with a rental yield of 4.87%. Following closely are Mayfair Gardens in Tsing Yi and Garden Rivera in Sha Tin, with yields of 4.75% and 4.73%, respectively.
Recent examples of investors purchasing properties for rental income further highlight this trend. For instance, in Sai Ying Pun, a 224-square-foot studio unit at Novum West was purchased last year for HK$5.6 million and rented out last month for HK$22,000, yielding a rental return of approximately 4.7%. Based on a 70% mortgage, a 30-year repayment period, and a mortgage interest rate of 3.5%, the monthly mortgage payment would have been HK$17,603 before the interest rate cut. This means the owner still pockets over HK$4,000 per month after paying the mortgage.
The rising rental yields, paired with recent interest rate cuts, have further fuelled investor interest. Many estates now offer a compelling case for long-term investment, as properties with yields exceeding mortgage costs provide both steady income and potential capital appreciation.
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