Hong Kong home buyers not only face spiralling property prices, but also soaring management fees
Labour costs account for as much as 40 per cent of a management fee, while utilities are around 30 per cent of the total
Residential management fees in Hong Kong, considered high by global standards, are set to climb further in line with skyrocketing home prices in the city.
Wheelock Properties, for example, is raising the monthly charges at its 256-unit Peninsula East developement in Yau Tong by 17 per cent above initial estimates just before handing over the apartments to buyers next month.
In 2015, Wheelock had said the management fee at Peninsula East, where flat sizes range from 480 to 1,033 sq ft, would be HK$3.30 to HK$3.50 per sq ft. Now, buyers can expect to pay HK$4.10 per sq ft.
“The charge in 2015 was a projection,” Ricky Wong Kwong-yiu, managing director of Wheelock Properties, said on Tuesday. “As operation costs have risen due to higher inflation and staff costs are also higher, we believe HK$4.10 per sq ft is reasonable.”
Buyers of so-called “nano flats”, even in ordinary areas, are likely to incur high monthly management fees.
A good example is the Edition 178 development in Kwai Chung. It will charge a monthly fee of HK$4.80 per sq ft – a level similar to Ultima, a luxury home project in Ho Man Tin that levies a monthly fee of HK$4.98 per sq ft.
Monthly management fees at residences near Edition 178 range from HK$1.60 to HK$2.50 per sq ft, agents said.
Residents at the 136-unit development, where apartment sizes range from 222 sq ft to 398 sq ft, can expect to pay a monthly management fee of HK$1,065 to HK$1,910.
Fees at the 128-unit One Prestige, which consists mostly of 163 sq ft units – considered the smallest apartment units ever to be sold on Hong Kong Island – will start at a monthly HK$5.50 per sq ft. That is about 130 per cent higher than fees at Robinson Place, the 22-year-old, 650-unit luxury development on Robinson Road in Mid-Levels West. Residents there pay about HK$2.40 per sq ft every month.
William Lai, head of property management at JLL, which manages 400 residential, office and industrial projects, expects residential management fees to continue rising, in line with increasing labour cost in the city.
“I’m not sure if Hong Kong management fees are the world’s highest, but they are definitely the most expensive in Asia,” he said.
About 40 per cent of the management fees collected every month are used to pay for staff at a development, while another 30 per cent is needed to pay for utilities, Lai said. Many residential buildings in Hong Kong have recreation clubs, indoor and outdoor swimming pools and provide round-the-clock security.
“It requires more management staff to maintain such services. For instance, an indoor swimming pool needs lifeguards,” he said. “Residents have to share such fees.”
Every private swimming pool, for instance, required at least two lifeguards costing as much as HK$60,000 per month in some cases, Lai said.
In addition to a gym, reading and dining rooms, residents atEdition 178 will also get cleaning and laundry services.
Lai estimated utility costs for a 5,000 sq ft club could reach HK$10,000 a month, with air conditioning taking up the lion’s share of expenses.