Mid-range three-bedroom monthly is rented at HKD 85,200; Weak advantages on attracting foreign companies to set headquarters.
Hong Kong Wen Wei Po (By Li Zhitian)
Hong Kong continues to hold the most expensive city for expatriate employees’ housing rent across Asian cities, taking a three-bedroom mid-range unfurnished house for example, the average monthly rent rose 4.9% to USD 10,929 (about HKD 85,200), higher more than 1.59 times than the eighth position Singapore (USD 4,215), which is unfavorable for Hong Kong attracting transnational corporations to set branch headquarters or offices, according to the survey result announced by human resources consultancy ECA International yesterday.
Hong Kong renting increased in 2018 mainly due to the shortage of suitable housing, which also a long-standing problem in Hong Kong property market, the Asia regional director of ECA International, Guan Lilian expressed. The increase in rents is not limited to the central area of Hong Kong in 2019, but also in remote areas because international companies are interested in searching more affordable office space and therefore aiming at suburban areas where rents are cheaper.
Long-term shortage; Hong Kong rent rose by 4.9%.
According to the report, the average monthly rent of an unfurnished mid-range three-bedroom apartment in Hong Kong international administrative staff centralized residence is about USD10,929, up 4.9% from the previous year and continue to hold the post of the most expensive across Asian cities. Tokyo rent increase is higher than in Hong Kong. Base on the housing style international staff preferred, the current average monthly rent is USD 8,668, an increase of up to 6.9%. Tokyo is still the second most expensive across Asian cities.
The Olympics are coming, so rent prices in Tokyo is expected to climb again.
Although Tokyo housing market has always been very tense, but the rents in 2018 rose significantly. In recent years, tourism has increased, and owners prefer short-term leases, leading rental costs increased. The 2019 Rugby World Cup and the 2020 Olympic Games will be held in Tokyo, which will bring a lot of business opportunities to Tokyo. These factors will make Tokyo's suitable rental supply less and less, so it is expected that the rental growth will continue until 2019.
In addition, rents in Singapore, which ranks the 8th, continue to fall, and the current average monthly rental cost for expatriates is USD 4,215. The average monthly rent of Hong Kong mid-range three-bedroom apartment is more than 1.5 times than in Singapore.
Singapore rental costs continues to decline.
The reduction of the non-resident population in Singapore is the main factor affecting demand for rental housing, which further reduces the rental cost of expatriates, Guan Lilian explained. In addition, Singapore recently published financial budget plan indicated to further decrease the proportion of overseas employees to 35% by 2021, which means the downward trend in rents will continue.
The report also pointed out that the rents trend of Mainland China cities were varied in 2018, with some increased sharply while others remained unchanged or fell. Shanghai ranks the highest on the list among Mainland China cities, on the 8th of the world and the 3rd in Asian cities, with the average monthly rent for expatriates at USD 5,305. Beijing, on the other hand, ranks the 6th in Asian cities with an average rent at USD 4,638.
Shenzhen housing rent rose by more than 10%.
Shanghai will introduce a new property tax in 2020, so many owners now choose to sell the property instead of continuing to rent, resulting in a decrease in the supply of rented housing and driving up rents, Guan Lilian continued. The average rent for Shenzhen expatriates staff has also risen sharply, with current average monthly rent of Shenzhen similar houses at USD 2,795, an increase of more than 10%.
He pointed out that Shenzhen economy is booming and close to Hong Kong, so housing demand remains high. Shenzhen housing market was particularly tense in 2018, leading to high rents, and this trend is likely to continue in the foreseeable future. Housing rent for Macao expatriates have also risen sharply, with the average rent rising by USD 280 to USD 3,583.
As for Macao, it has a high population density and fierce competition in the real estate market, therefore, the housing market trend is similar to Hong Kong, Guan Lilian expressed. Macau government recently enacted legislation to strengthen the protection of tenants, causing many owners therefore no longer to rent out properties, which further aggravates the shortage supply of housing.