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Economy & Finance

Cost of Living in Hong Kong

"Money makes the world go round." – This common saying is especially true for Hong Kong. Unfortunately, the cost of living in Hong Kong can be fairly high for expatriates. But this overview of your daily expenses provides some helpful tips on how to keep the average budget low.

In many international surveys, the cost of living in Hong Kong is consistently among the highest in the world. According to the 2012 and 2013 Mercer surveys, the city ranks 9th or 6th, respectively, among the cities with the highest expenses for expatriates.

It is especially accommodation, healthcare, and international schooling that contribute to the elevated costs. However, according to a recent ECA International survey, the big cities in mainland China may now be overtaking Hong Kong.

As in most other places, there is a clear distinction between the cost of living in Hong Kong for an expat lifestyle and local standards. The best way to slash your budget is to embrace a local attitude. For example, leaving the "expat bubble" or using public transport instead of owning a car can decrease your regular expenses.

Moreover, you should take the higher costs into account when negotiating your salary. If your company pays for your children’s schooling and your family’s healthcare, your cost of living will become dramatically lower.

Housing

One of the main factors which contribute to the high cost of living in Hong Kong is housing. It is not unusual for families to spend 50% of their overall budget on accommodation. The reason for this is simple: Hong Kong covers barely 1,100 km2, but it’s home to a population of 7.2 million people – a number which keeps growing.

The general shortage of land is reflected in the excessive property prices. Furthermore, using utilities adds up as well, particularly in summer when you need air conditioning. Most people live in apartment buildings, as suburban family homes are something that only the wealthy can afford. But your rental expenses also depend on where exactly you would like to live.

Many expats move to Hong Kong Island. The Mid-Levels are a popular area among very well-off residents from overseas. The neighborhood is close to the central business district and offers a good infrastructure, for example the prestigious Island School.

Families with younger kids tend to settle in the southern part of Hong Kong Island or in specific areas elsewhere, such as Discovery Bay on Lantau Island. Choosing one of these expat enclaves, however, you may expect to pay a HKD 50,000 (per month!) for a three-bedroom apartment. As for higher rents, the sky’s the limit.

Nevertheless, you can save quite a bit of money on rents if you are willing to move off Hong Kong Island. There are a number of expats who prefer to settle in Kowloon or in the New Territories due to cheaper rents. Single people on a budget should also think about sharing an apartment.

For more information on renting apartments, please refer to our article on renting in Hong Kong.

Cars and Public Transport

Buying a car in Hong Kong is not much more expensive than anywhere else. However, keeping and using a car on a daily basis can contribute a lot to your expenses per month.

Gas prices are high, and parking space won’t be the cheapest item in your budget, either. Moreover, there are annual fees for license renewal, which can amount to over HKD 10,000, depending on your type of car.

On the other hand, public transport is not only very reliable: It is also very cheap, compared to what you’d need to spend on a car. Rides on buses and the MTR start from HKD 4.50; tram rides require a flat fare of HKD 2.30 for adults.

You can thus reduce your daily expenses by using public transport in Hong Kong. Some expats also find it cheaper to frequently use a taxi rather than drive their own car.

Healthcare and Schools

On average, food and consumer goods tend to be a bit more expensive than elsewhere. Nearly everything has to be imported, for instance from mainland China. However, if you insist on buying goods from back home, you might have to pay even more for your food shopping.

Healthcare adds a hefty sum as well. A decent health insurance plan is essential if you want to make use of the private healthcare system – or your expenses will suddenly skyrocket in case of accident or illness.

If you ask expats whether it is possible to live on a decent budget in the city, you might get the answer, "yes – unless you have children." As local schools are only an option if your child speaks a fair amount of Cantonese, foreign residents generally stick with a Hong Kong international school.

Annual tuition for international schools can be anywhere up to HKD 190,000 for high school graduates. For some more popular schools you need so-called debentures as well, which may require up to several hundred thousand dollars.

However, debentures are often held by multi-nationals for their international staff’s kids. If this is the case for you, you needn’t be afraid of facing horrendous fees for schooling in Hong Kong.

 

We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete. 

InterNations Expat Magazine