Rental Rants
Expats continue to arrive in Hong Kong ignorant of what to expect from rented property. But what happens when the rent goes up and the company housing allowance goes down?
| Text : Neil Runcieman | | Photo : www.thinkstockphotos.com |
“It was a shock to find out that my rent was as high as my salary and that both were worth a lot less than I thought.”
To this day expats still arrive in Hong Kong systematically under-informed - nickel-and-dimed by the HR department in the US or Europe whose job description apparently includes making sure every middle manager who draws the lottery ticket of a transfer to the fleshpots of the Orient and the untold riches to be had there must be given a bad time.
In a year when residential rents are rising, there will be plenty of displeasure among Hong Kong’s large expatriate community. And for the purposes of this article “expatriate” means foreign workers residing in Hong Kong and receiving subsidies from their foreign employer to compensate for living away from home, where they are assumed to have housing to maintain.
And that in turn means a housing allowance, which is great. In principle. After all, most of us have heard stories about people using their housing allowances to buy a luxury yacht. If only we could use it towards a mortgage.
Well, that’s not going to happen. Or if it is, you’re someone so important you could probably afford the yacht already. If there are any companies out there whose housing allowance policy include the right for expat employees to invest it in property acquisition, they are understandably keeping very quiet about it. And it would certainly not be for the many. Plus there’s no point spending less than the allowance - the company won’t give you the change.
For many, however, how to spend the change from the allowance is a problem they can only dream of having.
“I remember a comedy show where one of the characters, a real loser, receives an unexpected gift. He’s over the moon, because he thinks this is finally the recognition he’s been waiting for, and the proof that he’s something special. But the joke is that everybody gets a gift, and everyone else’s is much better than his. So he’s still a loser. Ha. Ha. Ha.”
Andy Sinclair pronounces his ‘has’ slowly and without a trace of humour. His own version of the gift was a two-year contract as project manager in Hong Kong for a multinational company. It was, for him and his young family, a dream come true, and the numbers on the contract were beyond his expectations: “I just could not get my head around the fact that someone was offering me well over £1,000 a month for housing. That gets you a decent place where I live in England. And the salary was a lot more than I could get in the UK, too. Of course I should have stepped back and looked closer, but we were so over the moon at the idea of going to Hong Kong I’d probably have signed anything.”
Andy’s situation is a lot more common than most expats think – certainly more common than it should be. For senior executives transferring to a corporate regional headquarters, or investment bankers coming out to grind their numbers, there is rarely any discrepancy between expectation and what is actually on the table, particularly if Hong Kong is not their first expat mission.
Yet even senior executives complain habitually that HR back at Group is either ignorant of prevailing market rates and conditions, or downright devious in trying to finagle employees into signing up to deals that do them no favours.
For professionals and tradesmen rather lower down the food chain, the sticking point is unlikely to be over which particular model of Mercedes your company driver will chauffeur you around in. As expat packages have continued to decrease since the 1997 Asian financial crash, and conditions elsewhere in the world have made places like Hong Kong seem like El Dorado, employers have been able to reduce the sweeteners, too.
“Let’s face it”, laughs Paul, a long-term Hong Kong resident with permanent ID, new wife and child and secure long-term work, but now struggling to stay in Discovery Bay as rents rise, “Hong Kong is not exactly a hardship posting any more, is it?”
Paul has been around the block in Hong Kong not to worry too much. If he has to, he’ll go cheaper for a while, but he’s quietly confident it won’t come to that. “When I first came I’d have gone at it bull at a gate”, he says, “And I’d have had to move. Now I’ve learned to be a bit more like the locals. And I’ll probably be able to stay.”
For Angela, whose husband’s job pays well enough but keeps him travelling, and who has recently had to leave the apartment where she and her daughter were happy for one where they are not, local negotiating principles remain a source of mystery and frustration. “I’ve never seen anything so stupid and short-sighted,” she begins, perhaps not too auspiciously. “The lease was coming up, and the owner announced a rent increase, which took it beyond the range of our allowance.
After much haggling, pleading and mutual incomprehension, they moved. “We couldn’t make them budge, but it defied logic and it was about pennies, relatively speaking. And since we moved out it’s been standing empty for five months. What sense does that make?”
It’s a question that is probably best left hanging. But if there’s a next time, she might do well to seek an answer from Paul.
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