S'pore, HK luxe-home rents dip again
LUXURY-HOME rents in Singapore and Hong Kong, 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.
The average monthly rent for Singapore condominiums that are at least S$12,000 a month slid 0.2 per cent to S$4.86 per square foot in the three months ended June, the lowest since the December 2009 quarter, London-based broker Savills said.
Rents for Hong Kong homes that broker Jones Lang LaSalle categorises as luxury fell about 1.1 per cent in the first half of this year, bringing their losses to about 13 per cent since peaking in October 2011.
Banks, including Morgan Stanley and Barclays, 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.
Hong Kong was the most expensive place in Asia and the world for expatriate accommodation, a survey in January by London-based consulting firm Employment Conditions Abroad showed.
Tokyo and Singapore were second and third most costly in the region, according to the survey, which compared rents for "high-end, three-bedroom apartments".
Globally, Caracas and New York ranked second and third after Hong Kong last year, with Singapore coming in eighth.
Housing budgets for foreigners here have come down to about S$2,500 to S$3,500 a month, compared with about S$4,000 to S$5,000 a year ago, said Mr Alan Cheong, senior director of research and consultancy at Savills in Singapore.
Mr Denis Ma, Hong Kong-based director of Pearl River Delta research at Jones Lang LaSalle, said: "A lot of the demand has been driven by banking and finance and that's still relatively weak."
Three employees of banks and brokerages, who asked not to be identified because they weren't authorised to talk publicly about their packages, said that expat cutbacks had forced them to find less expensive housing in Hong Kong and Singapore.
They said they knew of others who had to do the same.
Housing allowances and other perks hark back to a time when it was more difficult to woo people to Asia. When financial markets in the United States and Europe were booming, banks had to provide incentives for people to come to Hong Kong and Singapore, said Mr Mark O'Reilly, Singapore-based managing director for the Asia-Pacific region at Astbury Marsden, a recruitment firm.
After the global financial crisis in 2008, the need to provide incentives to senior candidates to move to Asia diminished because the region's growth outlook attracted expats looking for jobs, Mr O'Reilly said.
"Expat packages are a thing of the past, especially in Hong Kong and Singapore," he added. "If you want to move here now, you do so on your own steam."