Mainland Chinese Underpin Hong Kong Luxury Rents, Savills Saysby
Vacancies for units HK$40,000-HK$100,000 remain tight: Savills
Housing allowances for financial services employees shrink
Chinese mainlanders are underpinning high-end residential apartment rents in Hong Kong as expatriate housing budgets in the financial industry are being slashed, according to Savills Plc.
Vacancies for luxury apartments remain low and budgets of HK$40,000 (just over $5,000) to HK$100,000 per month are the most popular, according to a note from the London-based real estate services company.
Savills said it has “noticed a shift in tenant profiles over recent months as mainlanders who have recently obtained Hong Kong ID cards look for top end apartments to rent,” Simon Smith, senior director research for the Asia-Pacific region, wrote in the report. “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.”
Housing allowances for Hong Kong-based finance and banking expats have been slashed or scrapped as banks such as Barclays Plc and Bank of America Corp. eliminated positions and exited businesses. Sentiment turned after China’s equity markets crashed, the Federal Reserve began raising interest rates and the political divide in the U.S. and Britain widened.
“Housing budgets in the banking, insurance and legal industries are 40 percent below what they were at the peak in 2012 and if anything, the tendency is still to downsize,” Smith said in the report.