JULY 2017

MARKETWATCH Information from Cartus on Relocation and International Assignment Trends and Practices.

HONG KONG

Up-to-date information on the residential rental market, international schooling and visa/immigration regulations in

RESIDENTIAL LEASING MARKET Serviced Apartments/Hotels The recent opening of several new serviced apartments has In recent years, rental fees for small- and medium-sized properties increased supply. As a result, serviced apartment occupancy has have increased, while rental fees for large and/or luxury properties dropped slightly, forcing landlords to offer promotional deals to have decreased. However, the first quarter of 2017 bucked the boost sales. trend as all property types saw rental fees increases. New serviced apartments: According to the Hong Kong government’s Rating and Valuation Little - 98 Tung Lo Wan Road, Tai Hang Department—Rental Indices, average rent by class recorded a 2% Opened at the beginning of 2017, offering studio, 1- and increase for Class A-C properties and a 1.1% increase for the 2-bedroom units ranging in size from 358-810sqft. These are larger Class D-E properties. boutique-serviced apartments and hotels offering both daily and monthly stays. Due to Hong Kong’s strong seller’s market, many landlords are opting to sell their properties rather than lease them, leading to CM+ serviced apartments - 16 West, Sheung Wan limited stock and increased rental amounts. Opened in Q4 2016, offering 54 deluxe studios (706sqft) with full harbor view. Properties priced between HK$30,000 and HK$80,000 remain popular among expatriates. However, a 3% to 5% increase has Beak Lane - 118 Queen’s Road West, Sheung Wan been forecast this year. Opened in Q3 2016, offering 700sqft one-bedroom units.

Occupancy rates for properties in excess of HK$150,000 are IMMIGRATION slowly creeping up, although demand is not as high as their 1) New Measure for Sponsoring Companies cheaper counterparts. With limited demand in this price range, In July 2016, the Hong Kong Immigration Department it is expected that rent will, at least even out or show a small 1% introduced a Declaration of Sponsor form, a compulsory to 2% increase. As a result, most companies have indicated no form to be completed by a sponsoring company for new major plans to dramatically change assignee housing budgets. employment visas and change of sponsorship applications, to the immigration process. However in Q4 2016 the Department In lease renewal situations, landlords have remained aggressive. revised their process, removing the Declaration of Sponsor form Rental reductions or even renewing at an existing rent are rare. and including extracts from it within an updated version of the Instead, average increases of 1% to 3% can be expected. Application for Employing Professionals in Hong Kong form. It is important to note, submission of the obsolete Declaration Despite the Hong Kong government’s property cooling of Sponsor form will result in a rejected application; therefore measures, which increased stamp duty tax on home purchases, we recommend any and all locally saved copies of this form be it is expected that home prices will continue to increase due to deleted going forward. strong domestic demand. 2) New Measure for Indian Visitors Low Range (HK$) Mid-Range (HK$) High Range (HK$) Effective from 23 January 2017, Indian nationals who enter Hong Kong as visitors have to complete a pre-arrival 1 Bedroom 17,000 – 30,000 25,000 – 48,000 55,000 – 80,000 registration (PAR) online. Upon approval, visitors using their visa-free entry can stay up to 14 days. 2 Bedroom 22,000 – 40,000 35,000 – 80,000 75,000 – 120,000

3 Bedroom 40,000 – 60,000 65,000 – 100,000 110,000 – 170,000 The PAR system requires travelers to answer questions regarding their travel history, contact information (in India and

CARTUS | MARKET WATCH: HONG KONG / JULY 2017 | PAGE 1 OF 2 JULY 2017

MARKETWATCH Information from Cartus on Relocation and International Assignment Trends and Practices.

HONG KONG

Hong Kong), amount of funds available, purpose of visit, and result, the School has offered its students the option to attend other questions. The system uses this information to conduct their Lam Tin campus, which is the main campus, or withdraw a risk assessment and instantly issues a printable approval slip with a full refund. NAIS has assured parents that it will continue if the traveler is accepted. Travelers have to bring the same to work with the Hong Kong government to resolve this issue. passport and the PAR-issued approval slip to be able enter Hong Kong. The new policy will only impact Indian nationals New School Opening – Stamford American entering Hong Kong as visitors. Indian nationals who have School applied for a relevant employment or training visa will not be Stamford American School (SAS) will start its first year at its affected by the new policy. Ho Man Tin campus this August. This year, the school will be providing programs from Kindergarten to Grade 7. Gradually, 3) Restricted Country Relaxation Stamford will expand its program offerings to Grade 12, making In Q1 2017, Cambodia was removed from Hong Kong’s itself a “through-train” school. SAS will offer a U.S.-based restricted country list for employment and training visas. curriculum, which adheres to American Education Reaches Out Cambodian nationals are now eligible to apply for employment (AERO) and Common Core Plus standards. Once SAS acquires and training visas. They must fulfill the same eligibility criteria as a high school, it will offer the International Baccalaureate other foreign applicants. Diploma Program for the last two academic years.

Vietnam has also been removed from Hong Kong’s restricted International Schools Cost Estimate country list for training visas (note, restrictions still apply for employment visas). Line Item Cost (HK$)

Application Fees 500 – 3,700 (non-refundable)

Assessment Fees 800 – 4,300 (non-refundable)

Annual Tuition Fees 40,000 – 218,200 (Nursery to Year 13)

Annual Capital Levy 5,900 – 60,000

Note: - The application and assessment fees quoted above are published by various international schools in Hong Kong. SCHOOLING - Some international schools require a mandatory individual Nord Anglia International School faces debenture, payable upon acceptance of a school place. difficulties opening its second campus Mandatory individual debentures range between HK$100,000 Early this year, Nord Anglia International School (NAIS) and HK$550,000. In this instance, no annual capital levy will announced that it will open its second campus in Tin Wan— be charged. Aberdeen, in August 2017. The school has been accepting students to its Tin Wan campus, however in late April, NAIS Exclusions: informed parents that they have been having difficulties getting - School Bus Transportation, Books, Uniforms, Laboratory the necessary permits from the Hong Kong government. As a Equipment.

For further information about relocating to Hong Kong, contact [email protected].

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© 2017 Cartus Relocation Hong Kong Limited. All rights reserved. Cartus and the Cartus logo are pending or registered trademarks of Cartus Corporation. Sources: Ratings & Valuation Dept, , Hong Kong Monetary Authority, Hongkongextras.com, Hong Kong Immigration Department. The information provided in this Market Watch publication is provided in good faith but is not intended to provide specific advice or to take the place of either written law or regulations. Cartus does not guarantee the accuracy or endorse any of the views or opinions given by any third parties and accepts no liability for the data and information included within.

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