WHEN you talk about residential accommodation in Hong Kong, not everybody thinks of a spacious flat with sweeping views. For a lot of flat hunters, the notion of a luxury flat is not even on the agenda. What is high on the list of priorities is rental accommodation that has enough space to provide a comfortable home, without emptying the bank. First Pacific Davies director Isabel Michie deals with the needs of tenants with budgets at the lower end of the market while servicing corporate clients who use the property company to find accommodation for employees at the top and the bottom of the rental market. ''This is the time of the year when a lot of corporations bring in young recruits and new graduates from overseas universities,'' Mrs Michie said. ''We have seen an increase in the number of young expatriates coming to Hong Kong and their presence has helped to make the lower end of the rental market more active,'' she said. Many of these arrivals work in research and marketing and will start their first job in Hong Kong so their accommodation needs are still quite flexible. South Horizons at Ap Lei Chau is widely thought to offer one of the best accommodation deals for tenants who do not have much to spend on their monthly rent. The cheapest rents for new leases at South Horizons start at about $14,000 for a 600-square-feet, two-bedroom flat. ''It's really a quality development that combines modern flats with excellent facilities,'' Mrs Michie said. Flanked by Aberdeen harbour on one side and with ocean views to the south, the development currently has 27 blocks and will have a total of 34 when complete. For one couple facing a typical Hong Kong rent increase, South Horizons was a convenient solution. Mrs Michie said the couple moved to South Horizons after the rent at their Tai Hang Road flat went up from $36,000 to $45,000 per month. At South Horizons, the couple moved into a three-bedroom, 750 sq ft flat that cost $17,000 per month. The exodus of tenants from areas such as Mid-Levels and Happy Valley has also injected new life into areas that would previously not have been considered. This trend is thought to be behind the surge of interest in Western, where roomy flats in older buildings can be rented for about $8,000 per month. ''Western is getting to be quite a trendy address and, as well as its cheap rents, it's also a good location,'' Mrs Michie added. The popularity of the Shun Tak Centre and new offices due to be completed are also expected to make Western a convenient residential area for new waves of office workers. According to David Faulkner, a partner at Brooke Hillier Parker, Western is now the focus of more attention but mainly because of its cheaper rents. ''Western has always been known as a budget accommodation area and, while it's getting more popular, it's too early to call the shift a revival for the area,'' he said. Another development worth exploring is the Heng Fa Chuen estate, which has been built above the Heng Fa Chuen MTR station on Hong Kong island. Rents at Heng Fa Chuen estate start from about $12,000 for a two-bedroom unit. As well as its convenient MTR access, the development has its own shopping facilities and cinema. According to Colliers Jardine residential leasing director Cathy Costin, there are still good deals around but flat hunters have to be decisive. ''Last week we had a furnished, 500 sq ft flat in a new Mid-Levels building for $15,000 per month,'' she said. According to Mrs Costin, a big part of finding a cheaper flat is deciding what compromises you can make. ''If Heng Fa Chuen is your choice, then you must be prepared to live in a Chinese neighbourhood,'' she said. Another tip from Mrs Costin for budget flat hunters was to limit dealings to just one agent. ''If you are working with a reasonably large company, then stay with them because hopping from agent to agent often ends with prospective tenants being shown the same multi-listed flat twice,'' she said. Confronted by the rising cost of providing accommodation allowances for their employees, some companies have re-packaged employment offers. Mrs Costin said it was now more common to see new arrivals with a single package combining accommodation and salary, leaving the amount that gets spent on rent up to the employee. Like most property companies, Midland Realty completed few flat sales in June and July. But on the rental side, businesses was brisk. ''People who would normally be buying are opting for a rental flat to wait out the uncertainty in the market,'' said Midland Realty chairman Freddie Wong. In the two-month period, the company leased close to 300 flats. While leases in the low end of the market represent a small part of its business, the contracts that were signed up were for flats at South Horizons. Pokfulam also has a supply of cheaper flats. The lower end of the market does not include a sea view but for between $11,000 and $12,000 a month, tenants can get a flat between 400 and 500 sq ft that overlooks the hillside. Rents at Laguna City in Kowloon Bay start below $10,000 and a two-bedroom flat at nearby Scenery Gardens rents for about $15,000 per month.