Why expats choose to live in Hong Kong forever

Disclaimer: These are my opinions and are not necessarily applicable to other expats working in Hong Kong or shared by them.

Most expats come to Hong Kong to live and work because of the relatively high pay and low income taxes compared to their home country. However, they soon realise that it is financially impossible to recreate the lifestyle they had in their home country in Hong Kong because it is prohibitively expensive for things such as:

1. Accommodation
2. Good food (like a good steak, meat, fruits and vegetables)
3. Parking for vehicles (HK$200 per hour in Hong Kong after the first free hour or two)

Let's quantify the accomodation cost difference because this is the largest expense in Hong Kong. In Sydney, one can buy a 93 sqm (1001 sqf) two bedroom apartment for A$525,000 (HK$3,402,000) on Castlereagh Street in the Central Business District (CBD). In Hong Kong, a 982 sqf apartment costs HK$8,000,000. That's a 135% difference in price on comparably a similar location and size. Another important difference is that in Australia the title is freehold whereas Hong Kong is leasehold until 2047.

In Hong Kong, the rent for the 982 sqf apartment is HK$25,000 per month. In Australia, its $700 per week which HK$19,660 per month. The interest rate on a mortgage in Hong Kong is only 2.1% p.a. while in Australia, the interest rate is 4.66% (as a 1 year introductory rate). Yup, so a higher rental income and lower mortgage costs in Hong Kong.

This concludes the apples to apples to comparison.

But why compare only between apples when Sydney offers a far better option than high density living in the CBD. For 20 minutes drive from the city to the suburbs, one can own a freehold title in a 727 sqm (7825 sqf) block of land and build a double storey house on it. Cost for the land is A$600,000 plus cost for building the house A$220,000, making the grand total is A$820,000 (HK$5,314,000). This is more space than 99% of people in Hong Kong will ever own or enjoy.