(Bloomberg) -- Hong Kong’s rental prices have finally recovered to pre-pandemic levels as mainland Chinese students and professionals flock to the city. 

Residential rents climbed for three straight months ending May to reach the highest level since 2019, according to Midland Realty. Rentals are emerging as a bright spot as much of the real estate market, including offices and residential sales, remains in a downturn.

The neighborhoods recording the most growth are those traditionally popular with mainland Chinese tenants, data from online rental platform Spacious.hk show. West Kowloon, an upscale area where the high-speed railway connects to the mainland, recorded a 12% rise in rents from a year ago in May, nearly three times the city average of 4.2%.

Following an exodus of residents and foreign workers during the Covid-19 pandemic, the Hong Kong government introduced visa programs that helped attract mainland Chinese professionals to the city. About 110,000 people have come to the city via the programs as of late March, according to the government. The median income of the participants in one of the programs was HK$50,000 ($6,400), well above the citywide median of HK$20,000.

A rebounding economy is also boosting the rental market, with “more jobs returning to the city in recovering industries such as aviation, hospitality, food and beverages and retail,” said James Fisher, Spacious.hk’s chief operating officer. 

Home sales in the city remain weak, with high interest rates pricing out many buyers. The number of transactions dropped by 28% in May from a month earlier, data from Midland show. Potential buyers staying on the sidelines also means more demand for rentals.

Singapore Rents

Meanwhile, rival financial hub Singapore’s rental market has been softening, with rents declining for the second consecutive quarter. 

But rents there are coming off record highs after a surge in real estate demand during the pandemic, partly driven by new arrivals from Hong Kong. A government-published index of private residential rents remains up more than 50% since 2019. The government is boosting the supply of new housing in response to the jump, helping moderate prices.

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