Consumer prices climbed 3.9% in May

Here's how it'll impact rent prices.

According to Nomura, the CPI for May came in at 3.9% YoY, down from 4.0% in April. Component wise, housing and food accounted for about three-quarters of inflation, down significantly from last year, when they contributed to more than 90%.

Here's more:

Overall food inflation fell to 4.0% from 5.2% in April, as prices of fresh vegetablesfell and meat prices held steady. On the housing inflation front, property prices have recently reversed course and rose forfive consecutive weeks.

Should this trend solidify and confidence returns to the property market, private rents will likely pick up in 3Q. Private rents fell in May (HK$22.5/sqft versus $22.8/sqftin April) after rising for 12 months up to March.

However, the housing component of the CPI does not fully capture recent dynamics in the property market as rentals are reflected in the CPI with a lengthy time lag. In May, the housing component of the CPI was still on an uptrend and increased to 6.2% from 5.9% in April.