Hong Kong is notoriously expensive, with limited space and high demand from its large international community driving up the cost of housing. Everyday items including groceries and fuel are also expensive, especially when compared to the relatively low average cost of living in mainland China. Kowloon or the New Territories are usually cheaper than the more prestigious Hong Kong Island, so it pays to be open-minded when considering where to move to.
With the high cost of housing, it’s estimated that expats in Hong Kong can spend up to half of their income on rent or mortgage payments alone. The limited area for building means that over 90% of the available accommodation is in high-rise flats or apartments, and while some can be more reasonably priced, they tend to be extremely small. One tip for finding a cheaper place to live is to look for a fourth-floor flat, as many Chinese are superstitious about the number four and will avoid taking rooms on this level.
Buying property in Hong Kong is also extremely expensive and prices have continued to rise despite the global financial crisis. On the positive side, there are few obstacles to foreign nationals purchasing property in Hong Kong. Estate agents’ fees are typically around 1%, and there is a 15% stamp duty to pay.
Deposits for accommodation in Hong Kong are typically between one and three months’ rent, and you are usually asked to pay rent for the first month in advance too. There is a standard process for agreeing a tenancy agreement and the government provides a template lease, but many landlords will add their own clauses to this so use a reputable estate agent to ensure you know what you are signing. Remember that most apartment-type buildings will also require you to pay management fees for communal amenities and maintenance.
Rates and government rent
Both owners and occupiers of properties in Hong Kong are liable to pay rates to contribute to general tax revenue. Rates are decided annually but are typically around 5% of the estimated rental value of the property. Government rent is usually the responsibility of the property owner. For more information visit the Rating and Valuation Department website.
Most tenancy agreements in Hong Kong do not include utilities. There are a relatively small number of suppliers in Hong Kong, so you are unlikely to have a choice of provider for electricity or mains gas. Some suppliers will request a deposit payment at the start of their service. Water is supplied centrally by the Water Supply Department and is quite reasonably priced. The communications sector is more competitive, so shop around for internet and telephone contracts.
Despite being a former British colony, Hong Kong does not have a TV licence system. However, free-to-air services can be limited so many expats pay for a wider choice of channels.
Healthcare and medical costs
Both public and private healthcare in Hong Kong is of a generally high standard. Public health services are administered by the Hong Kong Department of Health and the Hospital Authority, and are usually available to foreign nationals for a relatively small fee provided that they hold a Hong Kong identity card. However, waiting lists can be quite long so many people prefer to use private services. Private healthcare can be very expensive, but medical insurance schemes can cut this cost dramatically and many employers in Hong Kong offer private medical insurance as part of their employee benefits package.
Hong Kong’s shops are a top tourist attraction and despite the high cost of day-to-day items there are bargains to be found in other areas of the retail sector, particularly on branded goods. Most products are sold without taxation, while regular sales also attract shoppers.
VAT and sales tax
There is no standard VAT or sales tax in Hong Kong, with the majority of goods and services untaxed. The exceptions are alcohol, fuels and tobacco products, which do carry a duty.
- Rent on 1-bedroom apartment in city centre – HK$15,942.86 (≈£1,212.30) per month
- Rent on 1-bedroom apartment outside city centre – HK$10,166.67 (≈£773.08) per month
- Price of apartment in city centre – HK$137,027.98 (≈£10,419.63) per square metre
- Price of apartment outside city centre – HK$85,426.42 (≈£6,495.84) per square metre
- Loaf of bread – HK$14.37 (≈£1.09)
- Milk (1 litre) – HK$20.95 (≈£1.59)
- Bottled water (1.5 litre) – HK$12.32 (≈£0.94)
- Draught beer (0.5 litre) – HK$30.00 (≈£2.28)
- Packet of cigarettes – HK$50.00 (≈£3.80)
- Petrol (1 litre) – HK$16.97 (≈£1.29)
- Cinema ticket – HK$76.26 (≈£5.80)
Source: www.numbeo.com (accessed June 2014)
Budgeting and savings
The high cost of living in Hong Kong makes budgeting really important. Websites like Money Hero can be really useful in finding the best deals to help you keep spending in check.