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Luxury Rents Fall In Hong Kong On Expatriate Budget Cuts

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http://www.bloomberg.com/news/2013-10-21/luxury-rents-fall-in-hong-kong-on-expatriate-budget-cuts.html

Luxury-home rents in Hong Kong and Singapore, two of Asia’s most expensive cities for apartment leases, are declining for a third year as banks squeezed by slowing growth cut budgets for expatriate workers.

Rents for Hong Kong homes that broker Jones Lang LaSalle Inc. categorizes as luxury fell about 1.1 percent in the first half of 2013, bringing their losses to about 13 percent since peaking in October 2011. The average monthly rent of Singapore condominiums that charge at least S$12,000 ($9,670) a month slid 0.2 percent to S$4.86 per square foot in the three months ended June, the lowest since the December 2009 quarter, London-based broker Savills Plc (SVS) said.

Banks, including Morgan Stanley (MS) and Barclays Plc (BARC), are cutting investment-banking positions in Asia and scaling back expenses for many employees as corporate-finance activities in the region decline amid China’s slowing economy. Rents for luxury homes in Hong Kong, or those commanding more than HK$50,000 ($6,449) a month, could fall 10 percent this year, according to Crown Relocations.

The bankers cutting back, it's almost as if the global economy is fecked.

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Correct. Peak Debt was in 2008. The central bank mafia has done everything possible in the interim to expand the debt carrying capacity of the BRICs and emerging markets but now that bubble has ruptured fatally too. Lights out for the darkness.

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Don't make the mistake that all expats in HK are bankers. Lots of other industries have specialised westerners here due to the access to the China market. I have seen more germans here than in London, due to the engineering company links.

And re rents going downwards - I think it's more a supply/demand issue on expat choice, not income; lots more areas seem to be becoming acceptable to ex-pats which drives prices down in the traditional strongholds of mid levels, peak etc. I looked at a penthouse suite for a giggle which had come down from 100k/month (7500GBP) to 65-79k/month (5500GBP) - that is a hell of a drop. Still empty last time I looked online, and that was 4 months later.

Oh - and rent is tax deductible here, so if you look at a price, times it by 0.6 to get an equivalent cost to london where you have to pay it out of post tax income. :P

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