Hong Kong is most expensive city in Asia for expatriates to rent a high-end apartment
Rents for unfurnished 3-bedroom apartment in most popular expat areas near international schools in Hong Kong average HK$79,474 per month.
Hong Kong has ranked as the most expensive location in Asia for expatriates to lease a high-end apartments for the fifth year running, despite the city’s rents having fallen by about 13 per cent since 2012, according to a survey by ECA International.
The survey comes a day after Hong Kong kept its ranking as the world’s least-affordable urban centre to buy a home for the seventh year, says Demographia International Housing Affordability Survey’s study of 406 cities around the world.
The new study compares rental accommodation commonly leased by expatriate staff in more than 230 locations wordwide. ECA said Hong Kong’s rents are more than 14 per cent higher than Tokyo, the second costliest city in Asia.
Five years ago, rents in Hong Kong were around 20 per cent higher than in the Japanese capital but the gap has decreased significantly since then. Tokyo is followed by Seoul, Yokohama, Shanghai and Beijing in the regional rankings.
“Over the past five years, Hong Kong has continued to top our regional rankings. With a high population density and a consistently limited supply of properties. Average rents in the territory have long been more expensive than in other high-profile cities,” said Lee Quane, regional director for Asia at ECA International.
Rents for an unfurnished three-bedroom apartment in the most popular expatriate neighbourhoods near international schools in Hong Kong average US$10,189 (HK$79,474) per month.
“Despite high rental prices in Hong Kong, average rental costs here have fallen by around 13 per cent since 2012. In the years since, the residential rental market has been facing downward pressure as many homeowners are leasing out their properties rather than selling them,” said Lee.
Stella Abraham, head of residential leasing and relocation services department at JLL, said most rental properties attractive to expatriates are situated in Mid-levels, Island South and The Peak, where there generally has been limited supply.
JLL’s in-house indices showed luxury residential rents have dropped 24 per cent since the peak prior to the global financial crisis in 2008.
“Whilst there was some upward momentum between 2009 and 2011, luxury rents have more recently come under pressure again, owing to ongoing tenant downgrading trends in the market,” she said.
The downgrading trends are largely stemming from multinational corporations’ cost cutting initiatives on accommodation budgets for expatriate employees, which traditionally have been the top payers in the market, she said.
“ We would not be surprised though that these downgrading trends are also affecting other parts of the world. Whilst there is some level of demand in the top-end segment, most of the enquiries are currently arising from budgets below the HK$ 150,000 bracket,” she said.