As rents rise slowly recently, coupled with the possibility of US interest rate cut, the general public opinions have shifted to a bullish outlook for the property market. In fact, the government's massive relaxation of restrictions on the influx of skilled professionals has led the local population to increase in brief period of time. That was the major driver to raise up the rents. Therefore, it is illogical to judge the property prices will bounce up solely on rising rental yields.
The Hong Kong government's talent recruitment program, which was launched in 2022, had so far approved 295,000 applications. Some of which 195,000 had arrived, and a portion of them accompanied family members. It is conservative to assume that 400,000 new immigrants had arrived in Hong Kong since from 2022. If one-third of these new Hong Kong residents had purchased properties after arriving, there would be 60,000 units of residential inventory being consumed. If half of these residents had purchased first-hand properties from 2022 to 2024, the purchasing power of these new Hong Kong residents would consume 20,000 units annually.
As a matter of fact, the first-hand properties transactions were recorded at 10,000 units approx. per year during 2022 and 2023. 
In 2024, it recorded 16,000 transactions approx. The market estimated that 30% of these buyers were new Hong Kong residents and it was equivalent 3,000 of them entering the market annually during 2022 and 2023, and they bought another 5,000 units in 2024.
In short, among of 195,000 talents arriving in Hong Kong, only about 11,000 purchased first-hand properties. If there were another 11,000 of them purchased second-hand properties. As a result, there were 22,000 new immigrants becoming landlords during 2022 to 2024, leaving 173,000 newcomers rushing to the leasing market. These new Hong Kong residents, either were pessimistic to the property market or unable to afford to buy properties, would finally cause the rents to rise. Therefore, the rising rents were the result of more new Hong Kong residents being pessimistic to property market.
If you buy a property solely based on the rate of return. The current average yield of 3.5% was not justified to invest. Unless rental yield reaches 5% or above, it is not yet the right time to enter the property market. The gross yield 5% after deducting taxes and maintenance costs, the net yield will lower to less than 4%, comparable to a US dollar fixed deposit.
