How Much Do You Spend on Rent in Hong Kong?

How Much Do You Spend on Rent in Hong Kong? Here’s How to Deal with It

As we’re reaching the end of the month, your bank account balance surges to accommodate your hard-earned salary. It’s literally one of our happiest moments of the month. But, like most people in Hong Kong, you don't let yourself get comfortable with these new numbers because you know a big part of your income will soon go to your landlord to pay for one of priciest basic needs in Hong Kong: rent. Notorious for the high rent, Hong Kong might have intimidated a lot of expats because of the unavoidable rent. How do you deal with that? Fortunately, we’ve got Gini to share interesting insights on how to better allocate your monthly income for your life and financial goals.

How much are you getting paid to work and how much are you paying for a place to live? If you're like most people in Hong Kong, you might be spending around 50% of your monthly income on rent alone. Ouch. That hurts.

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Most financial planners recommend spending merely 30-40% on rent. How do you achieve this seemingly impossible goal?

According to a report by Midland Realty, almost half of the apartments in Hong Kong cost more than HK$20,000 per month for rent. When the average income of an individual is only HKD$16,400 in town, that puts nearly half of the available properties out of reach for most of the population unless they're willing to put more than all of their income on housing.

The rest of the available flats most likely come with a compromise: windowless rooms, multiple flights of stairs to walk up to, locations far away from the city center or MTR transportation, or tiny subdivided "studios" with barely enough room for a bed frame.

While rising rents prevail in most major well-developed cities, Hong Kong is definitely at the top of the list. Tenants in New York and Dubai spend an average of 48% of income on rent, while Singaporeans and Londoners set aside 44 and 43% respectively for rented housing. 

This is the reality of housing costs today. But what is the ideal? According to Forbes, 30% of your income is considered an acceptable portion to spend on rent, leaving 70% for other expenditures, including retirement savings.

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If you're already spending 50% on your apartment, a clear budget for your overall total monthly expenses can help allocate your remaining funds towards daily necessities and future financial goals. Money management is key to having a chance at affording the rent of Hong Kong while trying to save for your personal goals in the long run.

Where is your money going every month? Do you track them? When you actively track your income and expenses, you put yourself in a better position to make financial decisions within your ability and ideals. If you know spending 50% on rent is unsustainable in the long term and not aligned with your financial goals, you can start by looking for a roommate or a new job opportunity that relieves some rental burden.

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On the other hand, you can also choose to closely monitor the expenditures on your remaining salary to cut back on unnecessary expenses and put money towards investing in projects or other goals.

The majority of Hong Kongers have more than one bank account or credit card, making it hard to get the full picture on their monthly finance. In that case, you can make use of those personal finance apps for transactions tracking to get a better idea of where is your money going. Once the mist is cleared, you can easily start to save or cut back to allocate for smarter spending.

Without a clear picture of your monthly expenses, it can be easy to overspend, especially when such a large portion of your income is already going towards a single basic necessity. Living as an expat in Hong Kong already requires quite a lot of spending, making it more vital to get a full picture of what your salary really looks like after rent. After all, you should always prioritize your money and have it well-allocated in case any emergencies happen. When it does, that’s when an international health plan comes in handy, easing your financial burden without costing you a fortune.


Author bio:

gini is the first personal financial management app powered by bank-level security in Hong Kong. gini links together bank accounts to give users the full view of their financial situation, complete with insightful analysis, while curating offers from various sources to let them maximize the utility of their spending. The beta version of gini is now available on the Apple App Store


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