Mainland Chinese students are increasingly paying a year’s rent – and sometimes much more – upfront to secure homes near Hong Kong’s universities, helping to push residential rents to record highs and drawing investors back to small flats once marketed for first-time buyers.

The trend is becoming increasingly visible as the city’s summer student-leasing season gets under way.

A mainland Chinese PhD student recently agreed to pay nearly HK$700,000 (US$89,332) upfront to rent a two-bedroom flat at Pavilia Farm in Tai Wai for two years, according to property agents.

Another mainland student rented a two-bedroom flat at Sha Tin’s Lucky Plaza in the New Territories for HK$20,000 a month, or about HK$60 per square foot – a record for the development and a level more commonly associated with luxury flats in Mid-Levels on Hong Kong Island. The tenant paid an entire year’s rent in advance.

Landlords have widely adopted and welcomed such arrangements. Kenny Zhang, an agent at Youhouse Property who specializes in mainland student rentals, said annual rent payments have become common since the pandemic, particularly among students enrolled in one-year master’s programmes.

“The parents usually have the funds prepared already,” Zhang said. “For them, education is already a major investment.”