Property News · August 1, 2016

With banking expats leaving, who will rent Hong Kong luxury apartments?


Wealthy professionals and entrepreneurs are seeping from mainland China into Hong Kong’s high-end residences
Victoria Harbour, Hong Kong. Image credit: akwan.architect (Flickr)
Now that expatriates are coming in with far less meaty housing budgets, Chinese mainlanders are turning out to be a recourse for the prime Hong Kong residential market.
London-based real estate services company Savills Plc has observed a conspicuous shift in high-end tenant profiles over recent months toward Chinese mainlanders who have recently obtained Hong Kong identity cards, Bloomberg reported.
“Many of these tenants would have moved to Hong Kong seven years ago and are typically wealthy professionals or business owners rather than bank employees,” Simon Smith, Savills’ senior director for research in the Asia-Pacific region, reported.
A monthly budget ranging from HKD40,000 (USD5,000) to HKD100,000 (USD13,000) dominates Hong Kong’s luxury residential market, according to Savills.
Smith reported that housing budgets for expatriates in the banking, insurance and legal industries—a dependable wellspring of renters for the Hong Kong luxury market—have dipped 40 percent since a peak in 2012.
“If anything, the tendency is still to downsize,” Smith reported.
More: What lower corporate packages mean for Hong Kong real estate leases
Similarly, Jones Lang LaSalle (JLL) reported in May that only 7 percent of their expatriate clients in Hong Kong were allotted a monthly housing allowance of more than HKD100,000, a decrease of 31 percent from 2012.
In addition, 54 percent of clients subsisted on monthly housing budgets of less than 54 percent. Four years ago, that figure was only 11 percent.
Such relatively austere housing packages are being offered against a backdrop of job cuts. Institutions like Barclays, Merrill Lynch, BNP Paribas, and Bank of America have eliminated dozens of positions in Hong Kong and elsewhere in Asia in recent months.
Bloomberg reported, however, that expats in the fashion industry and other non-banking industries are still able to come into Hong Kong with housing allowances as high as HKD300,000 (USD39,000).
Read next: 5 reasons why Sheung Wan is the Brooklyn of Hong Kong

Source : property-report.com
Read more…With banking expats leaving, who will rent Hong Kong luxury apartments?

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