Singapore/Tokyo: When Australian expat Nic rang her daughter’s teacher in Hong Kong and asked for a report card so she could enrol the five-year-old in a school in Singapore, the teacher replied she had already had three calls asking for the same thing – for the same reason – that day.
Expat families are by definition used to relocation, but this year patterns established for decades have been shaken up. Hong Kong, once the most sought-after destination in Asia is losing out thanks to Xi Jinping’s increasingly authoritarian rule, and China’s zero COVID policy that, after two and a half years, expats increasingly have zero tolerance for.
For many expats Singapore, Hong Kong’s long-time rival as a regional hub, is the obvious alternative. The change in preference has stoked an already tight housing market and suddenly Singapore rents are on par, or even higher, than Hong Kong’s. And that’s if you can find an apartment.
“Schools and houses, schools and houses, they are the two things you absolutely have to focus on. I’m thinking of getting that tattooed on my arm to remind me I never want to do this again,” says Nic, who will fly from Sydney on Sunday with daughter Adelaide to begin her family’s new life in Singapore.
The family will pay just under $S15,000 ($16,000) a month for a four-bedroom apartment near Tanglin Rd in Central Singapore that came in just within their budget. “I think we got lucky. But we are having to compromise. And we are certainly not getting luxury.”
Nic says the family is sorry to have left Hong Kong after seven years. She cites the ramped-up police presence as one of the elements that made her uncomfortable, along with the heavy-handed approach to COVID-19.
Her daughter was in a kindergarten class where children and teachers had to wear masks. “We loved living there for a long time. Adelaide was born there. But it no longer made sense for Hong Kong to be our home.”
In contrast, Singapore has dropped most mask requirements and Changi Airport is buzzing again. The city-state has also introduced a new visa, the Overseas Networks and Expertise pass, to attract a particular class of foreign talent.
“What we are really hoping to bring to Singapore are the rainmakers,” Minister of Manpower Tan See Leng told Bloomberg, nominating leaders in science, technology, engineering and maths, as well as finance, arts, culture and sports. “It is an offensive strategy for us.”
It’s working. Real estate agents say the last time they can remember the private rental market so hot was in 2007. After a slow couple of pandemic years, landlords are increasing rental prices substantially. Jumps of 30 per cent to 40 per cent appear to be the norm when leases expire.
‘My neighbours, are moving to Singapore’
The reverse is happening in Hong Kong as the harbour city loses its lustre for expatriates who used to be drawn in by high-paying banking jobs and homes on the peak.
Rents in high-end enclaves such as Repulse Bay and Mid-Levels are plunging, international schools are closing, and the car market is saturated with second-hand luxury cars as expatriates leave in droves.
“Areas on the southern part of the island such as Repulse Bay and Stanley used to be an expatriate’s paradise. Now lots of people, including my neighbours, are moving to Singapore,” says Raymond Yeung, ANZ’s Hong Kong-based chief China economist.
“It’s not only affecting property rentals. I go to the supermarket and the notice board has a lot more relocation sales of Mercedes and BMWs.”
The main thing driving away high-earning expatriates is Hong Kong’s tight border rules. For more than two-and-a-half years, people have not been able to leave the city without enduring hotel quarantine on return.
Parents, in particular, are worried about the restrictions placed on their children who are forced to wear masks all day at school. There is also the fear of being ushered off into an Orwellian government quarantine facility if you test positive for COVID-19 on arrival back into the city.
Hong Kong’s top-end property prices, which used to be among the highest in the world, are now being eclipsed by Singapore thanks to the city’s talent exodus.
“Even before the pandemic, some expats were looking to move because of the protests and during the pandemic, of course, less people were moving to Hong Kong. Many who stayed are angry and disappointed and moving to Singapore,” says Winsome Lee, a Hong Kong property agent who manages properties rented to expatriates.
She says rents in high-end properties on the southern side of Hong Kong were renting for between HK$55,000 to HK$60,000 ($10,600 to $11,600) a month before the pandemic, but had now been reduced to HK$43,000 to HK$49,000 (($8300 to $9500).
In Singapore, soaring prices mean some would-be expats are having to reconsider their plans. Some of those rainmakers the city is pulling in command bigger salaries than others.
In 2019, one academic took on what she describes as her dream job with an Australian university in Singapore. She moved back to Perth in mid-2020 due to the pandemic and worked remotely. When the time came to review this arrangement this year, she found Singapore had become too costly for what she describes as her “very good” salary.
Add the $S50,000 cost of two kids in international schools to more costly rents, as well as the higher airfares to visit family in Australia, and the woman, who requested her name not be used, and her employer decided she would continue to do the Singapore job from Western Australia.
“I loved living in Singapore, but the government doesn’t make it easy to put your kids in local schools, and it will cost my employer less to fly me there a few times a year than to give me an allowance sufficient to cover the living costs there.
“Of course, it would be better for me to do the job in Singapore, but we really didn’t have much choice.”
‘A 40pc hike is not uncommon’
Megan Kinder, a property agent in Singapore who helps expats find properties, is having some tricky conversations. “My advice to clients whose lease is ending is that anything less than a 30 per cent increase is about as good as you can hope for. If you want something for the same money, you will be downsizing.”
“I’m not taking any new clients on at the moment. It is just too hard.”
When Andrew, not his real name, moved from London to Singapore with his family in mid-2020, they looked at 40 properties before settling on a four-bedroom apartment near Holland Village, a popular expat hub. They thought it was expensive at $S9300 ($9933) a month.
As the end of the lease approached, he offered to pay 10 per cent more for another two years. He was told he had insulted the landlord. Finally, after much haggling, the family secured a new lease for the property. The monthly rent has jumped 25 per cent to $S11,625 ($12,416). That’s an additional $S27,900 per year, after tax, Andrew points out.
“We consider ourselves lucky. I know several cases where the asking price doubled. A 40 per cent hike is not uncommon.
“You just don’t realise how little bargaining power you have. We’re fortunate in that my employer has helped cover some of that, but we have still had to look at what we will stop doing to make up the shortfall. Singapore has become a difficult and expensive place to live.”
Expats are also competing with increasing numbers of Singaporeans keen to live in larger properties in condos with pools and other amenities that are not part of the subsidised public housing.
“COVID left people with a taste for more space and there is simply not enough available,” said Christopher Quek from the Navis Huttons real estate group. His clients include mainland Chinese, Koreans and expats from a variety of European countries, who are all competing for rentals. Construction is picking up after being slowed down by the pandemic, but he does not expect conditions to ease this year.
“I’ve just put someone in a studio apartment near Orchard Rd. It was rented at $S2400. The new tenant is coming in at $S3700.”
“What should we do about the kids?” is the conversation that is driving many of the moves and expat families to compete for a finite number of places at Singapore’s independent schools.
One of these, UWCSEA, has just opened up applications for the school year starting August 2023. So far, the numbers are up by as much as 30 per cent, says Sinead Collins, UWCSEA’s director of engagement and external relations.
That might change but come April, the school, which has 5793 students across its two campuses, typically stops accepting applications. Collins says: “It’s very likely there will be more vying for the available spaces” than in previous years.
Back in Hong Kong, the government indicated this week it was finally preparing to abolish the city’s mandatory hotel quarantine rules. While this will help restore the city’s reputation as an international finance hub, many say it is too little too late. Events such as the Hong Kong Rugby Sevens, due to take place in November, will struggle to attract the international crowds it used to, even without hotel quarantine.
“It is not just hotel quarantine, but the anxiety everyone faces here,” says one senior business executive who is relocating back to Australia this week.
“People are angry about the stupidity and the lack of logic that is in play in Hong Kong, particularly for the many people trapped here for two and a half years. They’ve had enough,” he said.
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