Landlords showed greater flexibility in negotiations towards year-end as many were keen to lease vacant units before the traditionally quiet run up to the Chinese New Year in late January.

• Luxury rents on Hong Kong Island and New Territories recorded declines of 3.1% and 1.1% respectively, while rents in Kowloon rose slightly by 0.1%.
• Luxury rents by district on Hong Kong Island all recorded declines in Q4/2022, with Mid-Levels (-3.4%), Pokfulam (-3.8%), The Peak (-2.4%), Happy Valley/Jardine’s Lookout (-2.5%), Southside (-2.4%) all posting modest falls.
• Discovery Bay continues to face challenges on several fronts as demand from airline staff remains weak in terms of both numbers and budgets.
• Townhouse rents fell heavily by 5.8% over the quarter, with a 6.2% decline on the Peak and a 5.5% decline recorded in Southside.
• Looking ahead to 2023, we should see some revival in demand in the second half from businesses looking to capitalize on Hong Kong’s turnaround as restrictions are loosened and the border with the Mainland reopens.