Rents for luxury homes set to tumble as layoffs bite

Business Materials 8 December 2008 09:03 (UTC +04:00)

Rents for luxury homes are set to slump as jobs are cut in the face of the global economic downturn, a media report said Monday, dpa reported.

Property consultants expected rents for high-end homes, which were at record levels earlier this year, to drop by 15 per cent in the fourth quarter, with a further fall of 25 per cent anticipated next year, the South China Morning Post said.

Homes costing 200,000 Hong Kong dollars (25,640 US dollars) a month or more would be hit particularly hard, forecast Anne-Marie Sage, regional director at international property consultant Jones Lang LaSalle. "The top-end luxury segment may even fall a bit deeper," she added.

Flats with a monthly rent of between 80,000-150,000 Hong Kong dollars would also see a fall in price.

Edina Wong, a senior director of property consultant Savills, said: "Layoffs and the cuts in housing budgets will hit demand and ability to pay." Wong expected major landlords to cut rents by 20 per cent next year.

Banks and financial institutions such as Royal Bank of Scotland, HSBC, Standard Chartered Bank and Macquarie Securities Bank, have axed more than 1,000 jobs in Hong Kong in the last two months as a result of the global financial crisis.