Kai Tak New Area rent has not caught up with property prices

The new developments in Kai Tak have been taken into account, but the rental return is not satisfactory. The average rate of return is only about 2%. It can be said to be low for small and medium-sized houses. Owners may have to wait at least 2 years for commercial and retail sales in the district. After the transportation facilities have been improved, the rent is expected to keep up.

Kai Tak is definitely one of the areas where property prices have risen the most in recent years. The first privately-owned property in Kai Tak was China Overseas (00688) Kai Tak No. 1 (I). In August 2016, the first price list was announced. The first batch of 110 gangs was priced at only RMB 12,741 to RMB 15,562. In the same year, Chinese-funded Hainan Airlines rushed to the ground with high prices, which drastically pushed up property prices in the region and made the market stunned.

New investors have a rental return of only 2%

Later, in Kai Tak No. 1 (II), which was launched in January 2017, the discounted price has risen to 14,889 to 22,240 yuan, which is more than 20% more expensive than (I). The prices of other developers, such as Jiahui, Longyu, Tianzhu and OASIS KAI TAK, have also continued to rise. According to EPRC economic real estate database data, the average transaction volume of Kai Tak’s first-hand cargo units in the past six months呎The price has already reached 28,000 yuan, which is almost twice as expensive as the original Kai Tak 1 (I). It is definitely outperforming the market. Among them, a special unit of Jiahui has a maximum price of 53,000 yuan per square foot.

However, property prices have soared and rents have risen more slowly. In the past one or two years, the above-mentioned Kai Tak new trading began to enter the market. Since many properties were sold to investors at the time of the sale, the proportion of individual investors in new markets was as high as 4 or 50%. Rent, but the increase in rents has obviously failed to keep up with the increase in property prices, resulting in low rents and low returns in the region.

For example, Jiahui’s latest rental transaction, a middle-floor D room, with a practical area of ​​515 square feet, is a 2-bedroom garden view unit, rented out for 17,500 yuan, and the utility area is rented 34 yuan. As for the owners, they bought units for $9.772 million in 2017. The rental return rate was only 2.1%. The return rate for small and medium-sized houses was low.

On the other hand, some neighboring estates that have been in the vicinity for many years have more favorable rents. They are located in the middle floor of Room 2B of Harbour Block 2, with a monthly rent of $17,600. The rent paid is almost the same as that of Jiahui, but the area is only 446 square feet, which is more than Jiahui. Fine, practical and renting 39 yuan, the rent of the transaction is more ideal than the Kai Tak new building.

Even in the 35-year-old Tak Po Garden in Kowloon Bay, the monthly rent for a small unit is between $11,000 and $12,000. This has attracted many customers in the district to sublet the Kai Tak property.

Mature or more than 2 years in the district

I believe that the buyers who entered the new Kaide market in the same year are optimistic about the investment prospects in the region. However, the Shazhong Line, one of the selling points, is still open to traffic. The leisure and commercial facilities in the district have not yet been completed. It has not been able to provide a solid tenant group in the district. Residents should rely on the support of Kowloon Bay and Kwun Tong District for daily leisure. Behind the big market. The Kai Tak retail and commercial projects that each of Lifu (01212), Nanfeng and Xindi (00016) have won in the early years are expected to be completed as soon as possible after 2021, meaning that the owners of Kai Tak may still have to wait for more. In the next two years, the subsidies in the district will gradually mature, and the rents in the district will be able to keep up with the increase in property prices.