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Chris Tsang

Trapped between rising residential rents and the looming shadow of interest rate increases, Hong Kong homebuyers are revisiting that age-old dilemma when making decisions about housing: buy or rent?
The Centa-City Rental Index (CRI), which reflects the rent of second-hand private residential properties in Hong Kong, has been rising throughout the year to 136.34 in July from 129.57 at the beginning of 2026, a cumulative increase of 5.2 per cent.
“The rent is too high,” said Jimmy Lau, who works in the IT industry and spent HK$4.68 million at the end of last month to buy a 474 sq ft low-floor unit in Telford Gardens in Kowloon Bay, with a price tag of HK$9,873 per square foot.
“I had been renting before, and the lease was about to expire towards the end of the first half of the year,” he said. “But now that rents have risen a lot, my family suggested that it would be better to simply buy a home.”
He paid 30 per cent of the down payment to purchase his current unit and borrowed a 70 per cent mortgage with a 30-year repayment period. The current monthly mortgage payment is about HK$14,300.
“Currently the monthly rent for a similar unit is about HK$15,500 – but as the property price has dropped, and I made a relatively large down payment, the mortgage payment expense is now less than the rent,” he said.
Ivan Wong, senior area sales manager at Midland Realty, said that the rents on offer at Telford Gardens were up by nearly 10 per cent recently compared with the peak in the first half of the year, but that the asking prices of flats for sale had dropped 3 to 5 per cent. He added that this was why many tenants were considering buying rather than renting, hoping to snap up a bargain.
The summer holidays are the peak season for rentals. The market is booming, with high transaction volumes and rising rents
Now Wong, Midland Realty
Meanwhile, the market anticipates an interest-rate increase in the second half of the year. Following the Federal Reserve’s policy meeting in July, JPMorgan Chase significantly brought forward its forecast for the initial rate increase to December 2026, anticipating a gain of 25 basis points. It had originally been projected for the second half of 2027.
Unlike Lau, Chan – a teacher with little confidence in the property market – still had no plans to buy a home.
“I started renting a unit at City One Shatin about four and a half years ago – it is a high-floor flat with a saleable area of 327 sq ft and a two-bedroom layout,” said Chan. “The lease recently expired, and the landlord has raised the monthly rent to HK$14,500.”
Even though the rent at his flat in Sha Tin has shot up by more than 10 per cent, Chan decided to continue renting.
“I don’t have a clear view of the market outlook, there is too much negative news regarding Hong Kong’s economy right now, and there is a high chance of interest rate increases in the second half of the year,” he added. “The prospects for both the economy and property market remain uncertain.”
However, Chan had not completely ruled out buying a home, waiting another year before considering entering the market.

Despite buying a flat potentially being cheaper than renting, “buyers remain on the sideline” amid expectations of interest rate increases and slowing transaction activity, according to Now Wong, district associate director at Midland Realty.
City One Shatin recorded only 12 sales transactions in July, as owners lowered their asking prices with bargain deals at the HK$4.2 million and HK$4.3 million levels seen during the month, according to Wong.
He believed that once interest rate increases were implemented, the prices of some lower-floor units and those with inferior views would need to drop to the HK$4 million level to attract buyers.
“However, interest rate increases have no direct impact on the rental market,” he said. “The summer holidays are the peak season for rentals. The market is booming, with high transaction volumes and rising rents.”
In July, 118 rental transactions were recorded at City One Shatin, with an average rent of about HK$49 per square foot. In contrast, 41 rental transactions were recorded in January, with an average rent of around HK$43 per square foot.
“Rents have risen sharply. It is estimated that even during the rental off-season in September and October, they will only dip slightly,” he said.
Major players in the mortgage market, such as HSBC and Hang Seng Bank, continue to offer fixed-rate mortgage plans
Eric Tso, mReferral Mortgage Brokerage Services
Eric Tso, chief vice-president at mReferral Mortgage Brokerage Services, said an interest-rate increase was unlikely to occur before October.
While local banks have a high probability of following suit with rate increases, he expected the rise in mortgage rates to remain limited at around 12.5 basis points.
“Major players in the mortgage market, such as HSBC and Hang Seng Bank, continue to offer fixed-rate mortgage plans,” Tso added. “Homebuyers can opt for these schemes to manage the risk of rising interest rates.”
However, Tso cautioned that the property price trend was showing signs of an “uplift drift” as prices have fallen by 20 per cent from their 2021 peak, while rents will continue to climb due to constant demand.
“If it is affordable for buyers who need owner-occupation, it is still worth buying a home,” he said.


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Hong Kong property

Buy or rent? Hong Kong homebuyers face an age-old housing dilemma

City One Shatin in Sha Tin recorded only 12 sales transactions in July as owners lowered their asking prices. However, 118 rental transactions were made during the same month. Photo: Jelly Tse

Telford Gardens in Kowloon Bay. Photo: Handout

Business

Property

Hong Kong & China

Rising residential rents and the looming shadow of interest rate increases have the city’s homebuyers trying to balance out the risks


Rising residential rents and the looming shadow of interest rate increases have the city’s homebuyers trying to balance out the risks.


Buy or rent? Hong Kong homebuyers face an age-old housing dilemma

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Rising residential rents and the looming shadow of interest rate increases have the city’s homebuyers trying to balance out the risks

Rising residential rents and the looming shadow of interest rate increases have the city’s homebuyers trying to balance out the risks