Despite signs that increasing numbers of local residents are showing interest in serviced apartments, it still remains a market dominated by expatriates from around the world.
A robust demand for serviced flats comes from top executives and businessmen on short-term working contracts or business trips, as well as young professionals and young couples. They generally belong to the high-income group seeking fitted-out units with one-stop services. Americans and Europeans are the primary source of demand.
All nationalities are represented in the non-luxury sector, which allows the lower-budget tenant to move straight in without having to worry about buying furniture or incurring hotel bills.
A driving force in the service apartment niche is the influx of expatriate employees, especially those in the engineering profession who are under contract for major infrastructure projects.
Apart from business travellers requiring short stays, others seeking serviced apartments are families on long holidays away from home, and students seeking accommodation close to their universities. As serviced apartments are fully equipped, they constitute a cost-saving option for short-term stayers.
According to CB Richard Ellis, the number of expatriates from the United States and Canada has been increasing over the years, and started levelling off in 1997. Conversely, there was a decline in expatriate numbers from the UK in the two years preceding Hong Kong's handover.
There were some 126,000 expatriate executives in Hong Kong at the end of last year, and a large majority of them required serviced apartments.