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Hong Kong housing

Hong Kong expatriates moving out of traditional enclaves in search of cheaper housing, better life

Areas such as Tin Hau, Lamma, Ham Tin, Tung Chung and even Kwun Tong are becoming more popular with expatriates

PUBLISHED : Saturday, 08 April, 2017, 2:00pm
UPDATED : Saturday, 08 April, 2017, 11:24pm

Red-hot home prices in traditional expatriate enclaves are forcing foreigners to venture into unorthodox districts in search of cheaper alternatives and a better quality of life.

Districts that are now no longer affordable for some expats include Discovery Bay, Mid-Levels and Southern district, pushing expats to areas such as Ham Tin on south Lantau, Tin Hau, Lamma, Tung Chung and Kwun Tong – areas previously off the radar for well-off expatriates.

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“For areas such as [Hong Kong] Island South, The Peak and Mid-Levels, the rent is still going higher because [home] selling prices are climbing, so landlords will raise the rent,” director of property agency Centaline Sandia Lai said. “It makes those areas unaffordable.”

For example, the sale price for a flat in Mid-Levels – on the 23rd floor with a sellable floor area of 1,282 sq ft – has had an annual average increase in value of 11 per cent since 2009, according to Centaline. This gives landlords an excuse to raise rents.

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British expatriate Lee Faulkner, who moved to Hong Kong six years ago to take up a contract with an insurance firm, recently moved from his home of six years in Kennedy Town to Lamma.

“I wanted to be somewhere on Hong Kong Island, reasonably convenient ... I didn’t want to go somewhere that was completely alien to me ... and that wasn’t completely stuffed with expats,” the 55-year-old said. “Now that’s changed. In the three-and-a-half years that I lived there ... it changed enormously and now it’s almost as bad as Mid-Levels.”

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When Faulkner moved to Kennedy Town he was paying HK$19,500 per month for a 420 sq ft flat. But with the new MTR line opening in 2015 and the increasing number of expats moving to the area, Faulkner knew his rent was going to go up significantly.

Areas in west Hong Kong Island, such as Kennedy Town and Pok Fu Lam, were currently the hottest markets for expatriates, Lai said.

Faulkner chose to move to a 700 sq ft flat on Lamma for HK$17,000 a month. He was able to invest the money he saved in his business, which he started a few years later.

New Zealander Philippa Dalton moved to Hong Kong with her family in 2011 and had a similar experience as Faulkner.

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She chose to move out of Discovery Bay and in to Ham Tin – a village on southern Lantau – in 2015, partly to have a better quality of life for her family.

“The apartment we were in in DB was a tiny 700 square feet ... We decided to stay [in Hong Kong] long term and I couldn’t imagine living in that size of apartment for the rest of my life,” she said.

Dalton and her family moved in to a 2,100 square foot house for HK$42,000 per month, a jump of HK$15,000 per month, or 55 per cent, but significantly less money per square foot.

Her other reason for leaving was to get away from the “bubble” lifestyle of Discovery Bay.

“It’s very fake. We used to call it ‘The Truman Show’,” she said – named after the Jim Carrey movie about a man living obliviously inside a television show.

But Dalton credited Discovery Bay’s community for being “very welcoming” to newly arrived expatriates and helping them adjust to Hong Kong life.

However, with more expats moving to southern Lantau villages, Dalton worries rents may jump and push her and her family to look for cheaper housing elsewhere in the city.

Several factors were contributing to people moving out of expatriate areas, according to ECA regional director of Asia Lee Quane.

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“Typically companies will provide some assistance with housing costs ... Over the course of recent years companies have looked to reduce their costs [and] one of the casualties of that has been expatriate housing allowances,” he said.

Traditionally, expats who came to Hong Kong were in their 40s and married with children. However, the expatriate demographics had changed in the last few years, according to Quane. Now, younger and single people are moving to the city who do not require being close to international schools clustered on the south side of Hong Kong Island.

Hong Kong firms moving out of business districts such as Central and Admiralty – also in search of cheaper rents – was another factor in expatriates moving to other areas of Hong Kong, Quane said.

More transport links have also made it easier for expatriates to live further away from the city centre. Indian expatriate Murali Manoharan, 35, works for an IT company in Admiralty as a technical specialist but lives in Tung Chung.

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To reach his office is only a 25-minute trip on the MTR, he said, allowing him to save money from not having to rent a flat on the island – which would typically be in Mid-Levels.

Lai said expatriates who needed to work in Hong Kong’s business district but could not afford rents near the area would move to a place near an MTR station.

A common factor among these expatriates is a desire to stay in the city long term – and if that includes having to find cheaper housing in order to stay, they are willing to do just that.