Landlords are generally adapting to lower budgets while occupancy rates have held up well despite the downturn.

• Hong Kong Island, Kowloon and the New Territories recorded annual rental declines of 11.8%, 11.1% and 11.8% respectively in 2020.
• Landlords have been more willing to accept rent cuts requested by tenants rather than face the risk of lengthy voids.
• Discovery Bay (-15.4%) recorded the largest rental fall across all districts in 2020 largely because the district is heavily exposed to airline staff.
• Townhouse rents recorded falls of 3.1% and 10.5% in Q4/2020 and the whole 2020 respectively.
• Serviced apartments typically offered rental cuts of 10% to 20% to increase occupancy levels. More tenants are asking for more flexible lease terms given concerns over job security. 
• Both luxury residential rents and townhouse rents are expected to continue to slip in the first half of 2021 while we could see rents stabilise over the second half, vaccine and travel dependent.