The cost of renting luxury apartments in Hong Kong and Singapore is dropping for the third year running as banks cut budgets for expatriate workers. Rents for properties that are categorised as ‘luxurious’ by broker Jones Lange LaSalle Inc. dropped by approximately 1.1% in the first half of 2013, bringing them to their lowest point since December 2009. Rents for luxury homes in Hong Kong, or those costing more than HK$50,000 a month, could fall 10% this year according to Crown Relocations.
Many of the major banks, including Barclays Plc and Morgan Stanley, are cutting back on investment-banking jobs in Asia as well as scaling back expenses for their employees due to China’s slowing economy. “We’re not out of the woods yet in terms of the softening rental demand,” said Simon Smith, Hong Kong-based senior director of research and consultancy at Savills. “We’re still seeing a lot of turmoil in the financial services sector.”
Expats in Singapore made the news in July when it was revealed that British and European workers have been opting to spend their money on short term luxuries rather than saving for the long term, with one fifth of the 150 survey volunteers saying that they are not currently saving for retirement.
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