Hong Kong remains the world's most expensive city for high-income expat housing, though rents are expected to fall amid the ongoing coronavirus epidemic, according to a survey released on Wednesday.
The the third year in a row, the city topped a ranking by ECA International based on the monthly cost of an unfurnished, three-bedroom, mid-range flat in an area commonly inhabited by executive-level expats.
The average rent for such a flat in Hong Kong is US$11,318 (HK$87,747) per month, with Tokyo taking the second spot in Asia at US$9,207, ECA's 2019 Accommodation Survey found.
The eye-watering figure, an increase of more than 3 per cent from the previous year, is driven mainly by the city's high population density and lack of new housing.
However, rent is expected to drop in the coming months.
"In light of the prolonged anti-government protests and coronavirus outbreak currently under way, we expect to see rents fall throughout 2020 as the number of overseas workers in Hong Kong drops significantly and the usually high demand for housing is tempered," said Lee Quane, regional director of Asia at ECA International.
Hong Kong has been grappling with social unrest arising from the now-withdrawn extradition bill since June of last year, and the public health crisis caused by the outbreak of Covid-19 since January.
This is a developer-led market that's not highly leveraged, so not under pressure even in times of recession or when other kinds of pressure come to bearMark Cumming, strategic business adviser
Mark Cumming, a strategic business adviser who moved to Hong Kong from London 12 years ago, does not believe there will be a significant fall in rents.
"This is a developer-led market that's not highly leveraged, so not under pressure even in times of recession or when other kinds of pressure come to bear … I think if anything, rather than rents dropping, people will leave."
The father of two plans to remain in Hong Kong, but believes it has changed since the anti-government protests rocked the city.
"We used to refer to Hong Kong as golden handcuffs. It made it really hard to leave, because we had such a great lifestyle," the 54-year-old said.
"Yes, it was expensive, but we had a great city to live in that had great opportunities. It was absolutely safe. It was predictable. It was well governed to a degree. So much of that has gone."
Rents in Singapore, meanwhile, increased after five consecutive years of dropping for expatriates, due to an increased number moving to the city over the past 12 months. The average rent for equivalent high-end flats there rose to US$4,233 (HK$32,817) per month, an increase of 1.4 per cent from last year.
"There was evidence that expatriate populations were moving from Hong Kong to the relative stability of Singapore, thus increasing the demand for housing," Quane said.
Shanghai came third in the rankings for Asia " the most expensive rent in mainland China. Other Chinese cities also saw increases in the average rent, with Shenzhen seeing the biggest increase at 7.2 per cent.
Taipei, in Taiwan, moved into the top 50 most expensive locations for expat accommodation, with a rise of 5.3 per cent as more expats moved to the city.
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.
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