Shrinking Hong Kong financial sector causes falling rents

Published:  30 Sep at 6 PM
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Downturns in Hong Kong’s financial sector have resulted in cheaper apartments in many locations popular with expats.

Falling rents in a number of favourite expat neighbourhoods are being seen as signs of the continuing downturn in the island’s financial sector as well as an indication that expats are moving on. For decades, residential rents have risen as Hong Kong continued to expand its financial trade, but nowadays the pendulum is swinging in the opposite direction.

Ten formerly popular and pricey sectors of the city are now seeing major falls in rental charges as banks shed staff and slash accommodation allowances. The biggest fall since the beginning of 2016 is in Quarry Bay, an area peopled by the expat banking community. Its rental charges have fallen by an average of 13 per cent, with Discovery Bay rents also seeing double digit drops of 11.8 per cent.

Other neighbourhoods include Central with a nine per cent drop, Repulse Bay now cheaper by just over eight per cent, Sheung Wan down by eight per cent and SoHo neighbourhood with its just under eight per cent fall. The data represents no less than half a million properties listed during the first six months of this year.

Real estate agencies in Hong Kong are expecting further falls in rents across the region as major foreign investment banks, insurers and other financial firms cut jobs and salaries and limit bonuses. UK expat numbers in the city have decreased by over 10 per cent, with the American and Australian communities also seeing reductions on a smaller scale. In addition, new arrivals are down by a significant amount.

Expats determined to stay even if their rental budgets are slashed are leaving Hong Kong’s main island and putting down roots in West Kowloon. A good number are in no hurry to return to post-Brexit Britain and are rearranging their household budgets in order to continue their present lifestyle. Previously referred to as ‘the dark side’, Kowloon is now seen as a liveable alternative to Hong Kong Island itself.
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