Renting an Apartment in Hong Kong?

JAN 2021 | LAST UPDATED

 

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SNAPSHOT

Frequently in the top three most expensive rental cities in the world, searching for properties in Hong Kong can be challenging. With a population of 7 million and less than 25% of land developed on an island of less than 80 sq km, space commands a real premium in Asia’s financial city centre. The average living space here is a modest 50 sq mt, less than 600 sq ft. Indeed, the price for such ‘modest’ living space can, for some, be astronomical.

If you are planning to move to Hong Kong or are considering relocation options, you will probably be wondering:

  • Where are the best places to live in Hong Kong?

  • How do you find an apartment in Hong Kong and where do you look?

  • What’s involved in securing a place?

  • What are the (hidden) costs associated with renting in Hong Kong?

  • What are some common mistakes first-time renters make?

  • Am I getting a fair deal?

With our Hong Kong residential rental guide, you will navigate through both global and regional benchmarks, residential districts locally, the different types of accommodation available on the market, the first steps for renting property in Hong Kong and the important factors to pay attention to. Lets start!

PROPERTY SIZE | HONG KONG

Property size is quoted in square feet and historically in terms of the “gross area” – this is the area of the apartment plus the apartment’s pro-rata portion of common areas (such as the lift lobby, building lobby, stairwells etc). Subtract 15-20% to get an idea of actual useable space.

Saleable Area Provision (2014)

Starting in 2014, the government required real estate agencies to also quote the “saleable area”, also known as the “net area” – this is the actual size of the apartment, excluding the portion of common areas.

Most units have official values for both, though a few (generally older) developments do not have an official saleable area and some of the newest developments only list saleable areas without reference to gross areas.

Renters should be clear on the gross and net areas before making the decision to rent an apartment.

WHICH RESIDENTIAL TYPE? | HONG KONG

The majority of Hong Kong lives in high-rise buildings, where developers utilise land development to the fullest. The more modern high rise complexes can include a swimming pool, gym and clubhouse, tennis/squash courts and children’s playground.

Those with generous housing budgets may be able to reside on rare plots of land assigned to town-house and single free-standing houses. Yet regardless of size, most homes provide at most 2-3 bedrooms.

Apartment

The "Typical" Hong Kong apartment will be on one level with a combined living-dining room, kitchen, maid's room and toilet, utility/laundry area, two/three/four bedrooms and one/two/three bathrooms. Some have balconies (usually the older blocks) and others on the top floor may have exclusive use of the flat roof area above. Separate dining rooms are rare.

Properties built in the last ten years are equipped with modern, fitted kitchens and bathrooms, while many older units have been renovated, some to quite modern standard. Appliances are sometimes, but not always, provided.

Modern developments also often provide communal recreational facilities which may include swimming pool(s), tennis, squash, clubhouse and gymnasium, billiards, badminton and playgrounds.

Air conditioning is essential in Hong Kong and while the better buildings are equipped with central or individual systems, it is sometimes necessary to install your own and this should be checked while viewing properties.

Townhouse

Townhouses are usually built in developments of from around seven to 20 or 30 houses. Due to land space restrictions, these are often on four or five levels, sometimes with a small private garden and/or a usable flat roof.

They vary greatly in size from around 2,000 sq.ft. to over 5,000 sq.ft. The larger ones usually have a separate dining or family room or study, with three or four bedrooms and bathrooms.

A number of developments share communal pool facilities, and the larger or more expensive ones may also have tennis, squash courts or a clubhouse.

Houses

A private detached house and garden is a real luxury in Hong Kong and there are only a very few available at the top end of the market or in outlying areas.

Most accommodation is leased out in good condition with walls and ceilings all repainted, parquet flooring (common to most properties) polyurethaned and minor repairs made to fixtures and fittings.

Depending on the age of the property and the rental, kitchens can be fully equipped with cooker, refrigerator, dishwasher, washing and drying machine or not be equipped at all. In the latter case, the bare essentials of fitted cupboards and sinks only may be provided.

Where central air-conditioning is provided, there may be an extra cost for its maintenance or else the tenant may be responsible for maintenance during the term of the tenancy. If no central system exists, individual room units are necessary.

Except for the smaller sized or serviced apartments, most properties are leased unfurnished, there is a wide choice of household furnishings and fittings available in Hong Kong.

Serviced Apartments

A fairly wide choice of serviced apartments is available in Hong Kong, at sizes from around 600 sq.ft up to 3,300 sq.ft., but with the vast majority being under 2,000 sq.ft. These can be studios, one bedroom with sitting room, bathroom and open kitchen, or with two bedrooms. Very few serviced units have 3 bedrooms.

Leasing is often for a minimum term of 3 months although, when vacancy rates are higher, it is easier to obtain a 1 month lease. Most units range from good standard up to international hotel-suite standard and are well provided with linen, cutlery, crockery and cooking utensils.

RENTAL TERMS | HONG KONG

Leasing Conditions

Most properties are leased out in good decorative condition but unfurnished, often but not always provided with appliances which may include cookers, refrigerators, washing and drying machines, dishwashers and air-conditioners, but excluding soft furnishings such as carpets and curtains. Except for serviced apartments, furnished apartments are rare, which are usually smaller units with only one or two bedrooms.

Air-conditioners are essential for comfortable living during the summer months and, if not provided by the landlord, will need to be installed by the tenant.

Serviced apartments, with comparatively higher rentals, offer good to excellent facilities for short lease periods of three months or longer. Most have one or two bedrooms although some three-bedroom units are available.

Tenancy Agreements

Most tenancy agreements in Hong Kong are for a two-year period, although it is often possible to have an escape clause that gives the tenant the right to break the tenancy on giving two or three months' notice to the landlord after a minimum occupation period of 12 to 15 months. By law, the tenant has the right of first option to renew the tenancy after each two-year period, at the current market price.

Rentals

Rentals are in Hong Kong dollars payable monthly in advance and, except for serviced apartments, are usually exclusive of monthly management fees and government rates, for which an additional 12-15% of the rent.

  • Most apartment unit rents are quoted on an “Inclusive” basis, which includes the cost of government rates (taxes) and management fees.
  • Rents quoted on an “exclusive” basis do not include these additional costs.

It is advisable to find out what else is included in the rental amount (i.e. furnishings and appliances) and the cost of any add-on charges (Car Parking Fees and Utility Charges). This will enable you to calculate your total rent for the property.

Management Fees

These fees, payable by all occupants, provide for communal services such as security guards, cleaning and maintenance of common areas and amenities. The amount varies according to the age and number of units in a building and the type of amenities or quality of services provided.

Rates and Government Rent

Rates are a form of property tax on all private accommodation, assessed by and payable to the Government at around 5% of the approximate annual rental value. In addition, properties in some districts (part of the New Territories and outlying islands) are subject to government land rent, which is calculated at 3% of the rateable value. These charges are usually payable quarterly in advance by the landlord.

Available Funds Required

The tenant needs to pay a number of costs applicable to finding a home in Hong Kong as detailed below. Most are payable in advance or quite quickly after choosing where you will live in. It is recommended that you arrange to have funds available in advance in Hong Kong for this purpose equivalent to at least four times your budgeted monthly rental, preferably five.

Deposit

These are usually equivalent to two, occasionally three, months' rental and are payable to the landlord when an offer to lease is accepted. They are mostly refundable in full should the tenancy agreement not be signed. Once the tenancy agreement is concluded, the deposit is held by the landlord without interest, and refunded to the tenant upon expiration of the lease. The cost of any damage or reinstatement work necessary to the apartment, other than fair wear and tear, is deducted from the deposit before repayment.

The tenancy agreement is usually provided by the landlord or his solicitor (lawyer) with an initial draft for the tenant's approval. The tenant may use a solicitor to review the lease at his or her discretion. Each party is responsible for their own Legal Fees.

Government Stamp Duty

This is a form of government tax payable on all tenancy agreements, usually payable by the tenant and landlord in equal shares. The total amount payable on a two-year lease is 0.5% of the annual rent plus HK$5, or 0.25% of the annual rent plus HK$5 for a one-year lease (uncommon except for serviced apartments).

Agency Fees

The tenant is required to pay an introductory fee of half of one month's rental to the agent. In accordance with local practice, the agent may also accept a fee from a third party such as the landlord or landlord's agent. Package details available to corporations on request.

Utilities

Except for serviced apartments, it is the tenant's obligation to arrange for connection of utilities such as gas, electricity and telephone/fax lines. A deposit or connection fee is payable to each provider, roughly equivalent to two months' estimated usage, refundable upon termination of the service.

FAQS

DO I HAVE TO GIVE REFERENCES?

Once a rent has been agreed, the landlord or letting agent may carry out referencing checks to ensure you or a guarantor can pay the monthly rent. The job of a reference is to guarantee that you pose no risk to the landlord. Be prepared and have everything in place before you start looking. Remember, if you are a student or are still within a probationary period of employment, you will probably be asked to provide a guarantor. Make sure you pre-warn any referees that they are going to be contacted so they will be ready. This speeds up the whole process.

WHO SHOULD VIEW AND WHEN?

Families and sharers should try to view together to make sure everyone is happy. Evening and weekends get booked up quickly so it’s a good idea to try to take time off work to view everything in one go.

WHAT TO ASK AT A VIEWING

If you are viewing with an agent, they will ensure the property being let is in good condition. But if you’re viewing a property directly with the landlord, questions to ask include:

  • What bills will you have to pay in addition to the rent?
  • What is the local area like?
  • Who would you call if there is a problem with the property? How quickly will they respond?

RESIDENTIAL PRICE BENCHMARK | GLOBAL

In terms of price, Hong Kong remains in a league of its own, having dominated the Index over the past 10 years. Average prime residential values now stand at US$4,670 per sq ft, 56% higher than second-ranked Tokyo. New York and London complete the top four rankings, while Shanghai takes fifth spot from Sydney, where values slipped

RESIDENTIAL RENTAL BENCHMARK | GLOBAL

The cost of renting a prime property in different cities across the world varies significantly. For a like for like comparison, prime apartments (2,000 sq ft) are highlighted in the global benchmark chart below.

Rental prices in are quoted in HK$ per month and can vary widely depending on the location, size and attached facilities of the apartment. On average Hong Kongers spend up to 40% of their income on rent.

rESIDENTIAL BY DISTRICT | HONG KONG

Finding accommodation in this city can seem daunting at first, but at a closer glance you will find a range of options, from stand-alone townhouses facing the ocean and village homes to new flats near the CBD and old-style classic walkups in urban neighbourhoods.

Whether it is the Peak, Repulse Bay or Mid-Levels you look at, the city's excellent transport system makes all things possible, and is less challenging than the issues of achieving value for money and finding the right sized space. As a general rule the further you live from the city centre, the more you can get for your money

The obstacles exist no doubt, but out there in the concrete jungle are a whole host of solutions that fit your needs. Have a look at the district guides by renowned residential specialists Savills, to get a better idea of what is possible.

HONG KONG ISLAND

The Peak

Where is it?

Literally on the top of Hong Kong Island, the Peak is considered to be the most prestigious address on the island. This low-density area offers jaw-dropping views and cooler temperature, particularly in the summer. Country Park restrictions make for beautiful green walks, and views span Central, Kowloon and often as far as Stanley on south side. The area is no more than 15 minutes from Central, making it an extremely desirable location.

Why live here?

Larger residences offer comfortable and luxurious living conditions for the affluent few. You will find mostly townhouses, gated communities and exclusive low-rise blocks. The only drawback is the misty and foggy conditions during the spring and summer months. There are two large supermarkets and a popular shopping arcade located next to the Peak Tram station. The German Swiss International School and the ESF Peak School are located here. There are also several pre-schools to serve residents in this area.

Mid-Levels Central

Where is it?

This area is located above the Central business district, and comprises May Road, Tregunter Path, Magazine Gap Road, Bowen Road, Macdonell Road and part of Kennedy Road. Many of the up-market high rise developments there offer breathtaking, unobstructed views over the city and Victoria Harbour, and many offer comprehensive, five-star club facilities to their residents.

Why live here?

The area is right on the door step of Central, just minutes from the hustle and bustle of the city and the nightlife in Lan Kwai Fong and Soho, yet is just far enough away to enjoy a suburban lifestyle. The Botanical Gardens, Hong Kong Park and the famous jogging path on Bowen Road are all in this area. For serious hikers, trails up to the Peak are accessible from May Road; for less serious walkers, you can catch the Peak Tram.

Mid-Levels East

Where is it?

Located on the slope to the east of Hong Kong Park, the area comprises Kennedy Road, Stubbs Road, and all along Tai Hang Road to Braemer Hill. This is a purely residential area with a mixture of older and new developments.

Why live here?

This is the less congested part of Mid-levels and the greenery offers residents more breathing space. Real estate values are also slightly lower. Although the area is up on a hill, it is not far from Causeway Bay, Happy Valley, North Point and Quarry Bay where all the main shopping areas are. This is home to a few famous schools, including the Chinese International School, Japanese International School, French International School and Bradbury Primary School. The Adventist Hospital serves this area.

Mid-Levels West

Where is it?

Situated west of the Central district, this area stretches from Robinson Road and Conduit Road to the end of Bonham Road. This is the most congested section of Mid-Levels. A good number of major development have taken place here, many of which are 40-storey apartment blocks consisting of apartments between 400 -1200 sq ft. These state-of-the-art high-rises offer stunning views over the Harbour. As the area is served by only two major roads, traffic can get pretty congested at times. Nearby Sai Ying Pun and Kennedy Town are now home to some of the hottest eateries in the city.

Why live here?

One of the major pluses is the famous “pedestrian escalator” which provides easy, direct access to the heart of Central and the business district. It passes the entertainment areas of SoHo and Lan Kwai Fong and therefore attracts a good number of young executives with an active lifestyle. The famous art and antique areas along Hollywood Road are also in close proximity.

Western District

Where is it? The western shoreline of Victoria Harbour includes Sheung Wan, Sai Ying Pun (with its new escalator), Shek Tong Tsui and Kennedy Town. This is one of the oldest parts of Hong Kong Island and sits at the end of the tramway line.

Why live here? For years, it was ignored by expatriates even though it is right on the harbour and handy to everything in the city, but with many of its old market and wholesale centres being converted to art spaces and cafés, it’s very popular and a cheaper alternative to Mid-Levels. The new MTR extension is also a huge boost to the neighbourhood.

Happy Valley

Where is it?

Happy Valley is nestled between Causeway Bay and Wan Chai in a valley further inland from the Victoria Harbour waterfront. Being a little away from the rest of the districts, the area boasts its own unique village atmosphere. There are ample shops, banks and restaurants amongst the residential complexes, making everything in walking distance.

Why live here?

The area has a pleasant, village-like atmosphere and low-density environment. Shopping (supermarkets and open markets) and dining options are plenty. Causeway Bay is a close taxi, bus or tram ride away. The racecourse, the main attraction here, is not only a fun place on race night; it also offers an open, green space for football, and a jogging track. The Hong Kong Japanese School and French International School are nearby. The Hong Kong Sanatorium, a renowned private hospital offers 24-hour outpatient services.

Repulse Bay

Where is it?

Nestled between the ultra-rich properties of Deep Water Bay and the bustling market and promenade of Stanley, Repulse Bay is now one of the island’s most popular residential areas. With its superb views over the bay and South China Sea, the neighbourhood predominantly offers prestigious apartments in several high-rise developments centred on the famous Repulse Bay Beach.

Why live here?

Residents enjoy seaviews and access to a range of amenities. There are choices between townhouses and apartments in the 1,000 to 3,000 sq ft range. Residents can easily access Stanley for shopping and dining, or Middle and South Bay beaches for relaxing and swimming (all within a 10 minute drive). Avid hikers will relish the easy access to The Twins, along with The Wilson and Hong Kong Trails. As Hong Kong International School and South Island School are in the vicinity, Repulse Bay boasts a keen mix of expats and locals attracted to international education for their children. The newly-opened Pulse has a wide selection of restaurants, from Western cafes to Japanese eateries. At The Repulse Bay shopping complex (formerly the Repulse Bay Hotel) is Western fine dining as well as south Asian selections, in addition to a supermarket and other useful outlets such as doctors, dentists and fashion boutiques.

Deep Water Bay

Where is it?

Deep Water Bay is nestled alongside Shouson Hill, Brick Hill and Middle Island. At the bottom of Violet Hill is a beach and it is also reachable via Island Road which intersect with Repulse Bay Road and Wong Chuk Hang. Deep Water Bay Road has a number of large, detached houses in their own grounds. The area has a height restriction for development which makes this a low density area of mainly townhouses and low-rise developments.

Why live here?

In addition to the famous Deep Water Bay beach, there is a nine–hole, par three golf course which belongs to the Hong Kong Golf Club. The area is a green oasis not far from the city, and is close to the Aberdeen Tunnel. Most of the accommodation offers unobstructed seaviews and are within walking distance to the Beach and the seaside promenade to Repulse Bay Road. There are many international schools in close proximity, including Hong Kong International School, South Island School, Singapore International School and Canadian International School.

KOWLOON

KOWLOON TONG

Where is it?

At the foot of Lion Rock, Kowloon Tong is a low-density residential area with many detached residences. Due to the complex usage designated for this area, there are residences amongst a good number of Kindergartens and homes for the elderly. Accommodations are mainly houses and low-rise developments.

Why live here?

The area is very popular with local families because of the concentrated number of schools there; the American International, Australian International, Yew Chung School and Beacon Hill School, Hong Kong Baptist University and The City University of Hong Kong are all situated in Kowloon Tong. For amenities, Festival Walk is one of the city’s most famous shopping complexes.

WEST KOWLOON

Where is it?

On the western side of the Kowloon Peninsula, facing Hong Kong Island, West Kowloon is an area developed for commercial, residential and leisure use. With close proximity to Central via the MTR, and Jordan, the area is incredibly convenient. Its strong transport connections are solidified with an Airport Express station, and it is next to the future West Kowloon Terminus that will connect Hong Kong to Beijing via Guangzhou and Shenzhen by train.

Why live here?

The area comprises five residential complexes totaling slightly less than 6,000 units, some of which command the most expensive per-square-foot prices in the world. Union Square contains Elements, which houses more than 100 shops, an ice rink and the largest cinema complex in Hong Kong. The W Hotel is within the complex and the Ritz-Carlton, is located on the top floors of the 108-storey ICC Tower.

NEW TERRITORIES

Clear Water Bay

Where is it?

On the east side of Kowloon to the south of Sai Kung, Clearwater Bay features beaches, fresh air and country living. There is an abundance of outdoor activities, including a horse-riding school, a five-star country club with a golf course and a Marina. There are also two very popular public beaches and a big country park.

Why live here?

Clearwater Bay is popular with expatriates looking for a rural lifestyle. Many of the houses have good outdoor spaces and sea views. Properties are predominantly gated townhouse developments, with some of a very substantial size including private gardens and pools. The area is easily accessible from Hang Hau, on the Tseung Kwan O MTR line, by car and taxi. There is a popular hiking trail nearby to High Junk Peak and mountain bike enthusiasts will find much to enjoy here.

Discovery Bay

Where is it?

Located on the north eastern shore of Lantau Island, Discovery Bay is a purpose-built development consisting of all types of property from garden houses to high-rise towers of up to 24 storeys. The development also features a 400-metre-long privately-owned beach, four private membership clubs including a golf club and a marina club, and a public park (Siena Central Park).

Why live here?

This is a true island idyll, yet still only 25 minutes from Central by air-conditioned fast ferry. A self-contained community, it has ample eateries, shops and waterfront facilities. There are two international schools and several Kindergartens offering first-class education. Its close proximity to the Hong Kong International Airport attracts Airline staff and frequent travellers. The connection to Tung Chung offers an alternate route into the CBD via the MTR.

PARTNER WITH SAVVI

SAVVI works with all residential operators, providing you full market coverage and a single point of contact to support you and your corporate residential needs going forward.

We create and source differentiated opportunities and deliver scalable bespoke real estate solutions from small to large real estate proposals with institutional grade expertise.


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