IT'S an Asian gold rush. Expatriates are flooding into Hong Kong looking for riches and a luxury lifestyle as Western firms hustle for a share of China's economic 'miracle'. But it's business at any price and the fall-out is inflated salaries, sky-high rents and havoc in the housing market.
The downside for people already in Hong Kong are rent increases of up to 50 per cent, forcing families out of their homes and sometimes out of the territory. For every person who can't afford the new rent, there are two companies willing to foot the bill for their expatriate staff, say estate agents. Rents went up by about 30 per cent last year (about 10 per cent in the last quarter) and this trend is expected to continue. Estate agents predict another 30 per cent increase before the end of this year.
Luxury apartments are fetching exorbitant prices and are in short supply. People trapped in the middle are feeling the domino effect because landlords - all too aware of the escalating prices and the shortage of apartments - are milking the market for all it's worth.
Two professional couples were forced to leave Hong Kong last month when their rentals jumped an unaffordable 50 per cent from $18,000 (Mid-Levels) and $22,000 (Happy Valley). They were faced with a tough decision: move downmarket or move out altogether.
A couple who live in a Pokfulam high-rise this week found out that their rent had gone from $28,000 to $40,000. They have registered a complaint with the rent tribunal and will have to look for cheaper accommodation or leave Hong Kong. Apartments at another complex in Pokfulam which were renting for approximately $39,000 late last year are now going for no less than $52,000.
An agent who called a landlord two days after her company advertised his Happy Valley property was told that it had gone up by $10,000 since the advertisement was placed.
None of this, not the greedy landlord nor the staggering rent increases, is surprising, say estate agents who admit even they are amazed at the speed at which rentals are rising.