Soaring Hong Kong rents: tenants pay more – and fight for shrinking space

For business owner Tracy Sung, flat-hunting in Hong Kong was complicated by two things – her pets and the intense competition in the rental market. Sung, who used to live in a 500 sq ft flat in Happy Valley, had to offer more than the landlord’s asking price to secure an 800 sq ft property in Tseung Kwan O. The 28-year-old is paying about HK$35,000 (US$4,480) a month for her new home, compared with HK$28,000 previously. The neighbourhood in Hang Hau offered what she considered the most reasonable rent and pet-friendly flats, she said. The New Territories district’s larger area and open spaces suited her and her birds. Although commuting to Hong Kong Island and Kowloon would take longer, she did not mind because her business allowed her a flexible schedule. “I took the flat on the same day we looked at it because the other two previous times when I negotiated, someone placed a higher offer after mine so I had to either bid higher or just give up,” Sung said. “It was quite harsh because other would-be tenants would make offers such as an outright one-year payment of the rent, so I either had to match or raise my bid.” Sung is not alone in finding Hong Kong’s rental market challenging. Newly married Eunice Fermin-Trin and her husband faced a different dilemma – choosing between bigger space and better location. Their new flat in Wan Chai is about 200 sq ft bigger than their previous one in the same district, at essentially the same price. They now pay about HK$25,000. “The previous building was in a much more central location, where everything you needed was just a five- to seven-minute walk away and it was also newer, whereas our current building is a lot older and not as close to the MTR station,” she said. If they had their way, Fermin-Trin said they would have wanted a better location and more space. “In Hong Kong, everyone’s fighting for space or the rent per square foot and this flat is the best value for money that we have seen in the market,” she said. Sung and Fermin-Trin’s experiences reflect the state of Hong Kong’s rental market. Rents climbed to a record high in December, boosting annual gains to 4.26 per cent in 2025 and marking a third consecutive year of increase, official data showed. Relief was unlikely for tenants amid the government’s initiatives to attract top talent and more professionals and its push to expand the city’s role as a global education hub, analysts said. The surge in rents coincided with the rise of non-local companies registered in the city. By the end of 2025, there were 15,586 such firms, up 3 per cent from 2024, with 1,532 newcomers during the year. The government also proposed raising each public university’s enrolment cap for non-local undergraduates to 50 per cent of local students, up from 40 per cent, starting in the 2026-27 academic year. That would lift the quota to 37,000, an increase of 7,000. In 2024-25, 17,161 non-local students attended Hong Kong’s eight publicly funded universities, with 12,386 – or 72 per cent – from mainland China. “Rents are currently at peak levels,” said Derek Chan Hoi-chiu, head of research at Ricacorp Properties. “Looking ahead, we expect continued upward pressure with a full-year increase of around 3 per cent for both small to medium-sized units and luxury residential rents.” Tenants already under pressure “may have to downgrade their accommodation, moving from larger units to smaller ones”, said Louis Chan, vice-chairman and CEO for residential, Asia-Pacific, at Centaline Property Agency. The agency estimated that rents this year would likely jump by about 5 per cent, setting another peak. In 2025, the Centaline Rental Index rose by 5.21 per cent, marking three consecutive years of growth. This is not good news for Nicole Corpuz, a 28-year-old Hongkonger working in the legal sector who is in the early stage of looking for her own place. While buying was an option, she said uncertainties in the property market made her uneasy, so renting was a safer choice. “I would choose to rent a flat until I see that the property market has stabilised again,” she said.