The Rating and Valuation Department announced that the private residential price index in August fell by about 1.7% monthly, marking the fourth consecutive month of decline. The index has declined by about 6.2% in the first eight months of the year. Allen Choi, Chief Analyst of Midland Realty, pointed out that based on the latest (September 23) Midland Property Price Index reporting a 127.84 point, a further decline from August, with a cumulative 7.07% drop in prices so far this year. It is believed that the property price index from the Rating and Valuation Department will continue to fall in September.

In contrast, the rental trend is surging further. In August, the private residential rental index from the Rating and Valuation Department increased by about 1.1% monthly, marking a six-month consecutive increase and reaching a five-year high. The rental index has increased by about 6.2% in the first eight months of the year, with only a marginal difference of about 1.3% from the historical peak. According to Allen Choi, based on the Midland "Rental Trend Chart," the average rent per square foot of private residential properties calculated by usable area in August is about HK$37.88, with a monthly increase of about 1.26%. It has seen a six-month consecutive increase, hitting a near five-year high, and is only about 1.17% lower than the historical peak. With a continuous influx of high-skilled talents in Hong Kong, it is believed that rents will further rise significantly. It is estimated that rental rates for the whole year may increase by 8%, surpassing the historical high.

He believes that the situation of rising rents and falling prices is extremely rare, with this trend persisting for two consecutive years. Compared to the end of 2022, the latest "Midland Property Price Index" released on September 23 this year has dropped by about 12%, while the Midland "Rental Trend Chart" for August has increased by about 13%. The divergence between the two trends continues to intensify.

Allen Choi also mentioned that with the trend of rising rents and falling prices, rental yield is on the rise. According to the latest data from the Rating and Valuation Department in July, the rental yield of Class A (with a usable area of ​​approximately 430 square feet or less) small units in private residential properties is about 3.6%, an increase by 0.8 percentage points compared to about 2.8% at the end of 2022, and has risen to a new high in 12 years. With the widening trend of rising rents and falling prices, rental yields are expected to continue to rise.

In addition, he mentioned that Hong Kong banks lowered interest rates by 0.25% last week, prompting developers to revive their pace of launching new projects, all at low prices to seize market attention. It is believed that property prices will inevitably come under pressure in the short term. However, the interest rate reduction cycle has officially started, and mortgage rates are expected to continue to fall, easing the financial burden of property purchases. Conversely, rising rents may prompt tenants to endure higher rents, leading to an increase in cases of transitioning from renting to buying; meanwhile, rental yields continue to rise, regular interest payments decrease, attracting long-term investors amidst fluctuations. It is believed that with the support of buyers and investors entering the market, it will help stabilize property prices.