Hong Kong still the most expensive Asian city for expat executives to rent
Survey finds average rent for 3-bedroom, mid-range flat is an eye-watering US$10,461 as developers’ focus on micro flats hurts supply
Hong Kong remains the most expensive city in Asia for high-level expatriates to rent housing, according to a survey released on Tuesday.
The city topped a poll by ECA International based on the monthly cost of a three-bedroomed, mid-range flat in an area commonly inhabited by executive-level expats for a fifth straight year. The gap with other Asian cities widened.
The average rent for such an apartment in Hong Kong is US$10,461 (HK$81,848), beating Tokyo in second place by more than US$2,000, ECA’s 2017 Accommodation Survey found.
The figure, up 4 per cent from a year earlier, is mainly driven by high demand and a lack of mid-range supply as builders focus their efforts on so-called micro flats.
“Hong Kong saw the first rise in rents for such flats last year for five years. Key driving forces included a slight increase in demand, continued lack of mid-range rental units under the recent continued supply of tiny flats and lack of new supply in areas near international schools,” said Lee Quane, regional director of Asia at ECA International.
Quane said he did not anticipate a fall in demand for mid-range accommodation because multinational companies are still sending just as many staff to Hong Kong.
Mid-Levels, Stanley, Clear Water Bay, Sai Kung and Discovery Bay were among the Hong Kong districts included in the scope of the survey.
The results of the survey are used by companies to determine levels of assistance to be provided to international executives to meet housing costs when being relocated overseas.
It found Tokyo was 20 per cent cheaper than Hong Kong, compared with 14 per cent in 2016, Shanghai was 50 per cent less expensive, Manila 65 per cent and Malaysia’s Johor Baharu by 93 per cent more affordable.
All Chinese cities surveyed saw their mid-range rental costs rise, particularly in the Pearl River Delta where they were driven by rental incentives.
The southern cities of Guangzhou and Shenzhen saw increases of 12 per cent and 11 per cent respectively.
Shanghai came third in the rankings, with the most expensive rents in mainland China. Its average monthly rate for a mid-range flat has climbed 13 per cent since 2012 because of a supply shortage and population increase. The figure is still about half Hong Kong’s.
In contrast, Southeast Asian cities such as Singapore saw their mid-range rental costs fall amid an oversupply.
“Singapore imposed immigration curbs as well, resulting in a 15 per cent drop since 2012 and putting it in eighth place in the ranking, down from the fourth in 2016,” Quane said.
Other experts agree with Quane that mid-range rents in Hong Kong will remain the most expensive in Asia.
“The situation will not change until we have another financial crisis. The demand is still strong. We expect the price and rental of residential units will continue to increase steadily this year,” said Thomas Lam, head of valuation and consultancy at Knight Frank.
Hong Kong’s overall rents have also shown no signs of easing. The official rental index rose for a 20th consecutive month to 186.6 in November, the latest available data, according to the Rating and Valuation Department.