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Aug 14, 2017

Rental yields in Hong Kong are very low


Last Updated: Aug. 14, 2017
HONG KONG ISLAND - Apartments PRICE/SQ.M. (US$) YIELD (p.a.) PRICE/SQ.FT. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
<40 sq. m. 781,529 2,241 3.44% 19,538 56.03
55 sq. m. 1,085,770 2,824 3.12% 19,741 51.35
85 sq. m. 1,990,304 4,718 2.84% 23,415 55.51
130 sq. m. 3,422,199 7,470 2.62% 26,325 57.46
>160 sq. m. 5,091,819 9,048 2.13% 31,824 56.55
KOWLOON - Apartments
<40 sq. m. 644,498 1,747 3.25% 16,112 43.68
55 sq. m. 910,760 2,267 2.99% 16,559 41.21
85 sq. m. 1,765,425 3,779 2.57% 20,770 44.46
130 sq. m. 2,851,013 5,560 2.34% 21,931 42.77
>160 sq. m. 6,830,678 7,717 1.36% 42,692 48.23
NEW TERRITORIES - Apartments
<40 sq. m. 606,996 1,461 2.89% 15,175 36.53
55 sq. m. 732,046 1,723 2.82% 13,310 31.33
85 sq. m. 1,195,610 2,673 2.77% 14,066 32.50
130 sq. m. 1,685,826 4,225 3.01% 12,968 32.50
>160 sq. m. 1,854,840 4,909 3.18% 11,593 30.68
HONG KONG ISLANDS - Midlevels Estates
Hillsborough Court n.a. n.a. 2.26% 41,456 78.22
Tregunter Tower n.a. n.a. 1.93% 44,750 71.93
37 Repulse Bay Road n.a. n.a. 1.83% 53,570 81.72
KOWLOON TONG - Estates
One Beacon Hill n.a. n.a. 2.42% 44,355 89.56
Meridian Hill n.a. n.a. 2.21% 29,549 54.43
One Mayfair n.a. n.a. 1.94% 47,269 76.40
NEW TERRITORIES Estates
Villa Concerto (Symphony Bay) n.a. n.a. 2.89% 15,354 36.94
Marina Cove n.a. n.a. 2.42% 32,886 66.33
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Source: *Hong Kong Rating and Valuation Department **Midland Realty Definitions: Data FAQ See also: Update Schedule

Hong Kong´s property market is in a select band of cities where gross rental yields - the percentage return to owners on renting out their property - is only just above 2%. Effectively, this means that landlords are unlikely to make any profit on their apartments, once empties, administration costs, cleaning and repairs, and other costs are taken into account. Or, if not nothing, then very little. Other such cities are Monaco and Taipei.

That´s not to say rents are low. You will pay USD 7,000 per month for a 120 square metre (sq. m.) apartment in Mid Levels. But if you want to buy it, it is likely to cost you USD 3 million.

Hong Kong is not a ‘typical’ market. It is a place where the rich choose to park assets in the form of apartments, as part of a diversified asset-safeguard strategy - like Monaco and Singapore. Such markets typically have lower rental yields than more ‘normal’ housing markets.

Round trip transaction costs are high for foreign buyers in Hong Kong (though the surcharge is unlikely to be permanent). See our Property transaction costs analysis for Hong Kong and Property transaction costs in Hong Kong, compared to the rest of Asia.






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