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Looking
for housing in Hong Kong is a taxing experience. It is unlike
any other city and often does not appear logical. Keep the
following in mind when you start your search as this will
help you come
to terms with the property market and conditions here. Rental levels have increased 40% during 2005 for
some
property types, Hong Kong is considered one of the 3
most expensive cities in the world.
Remember the following:
Apartment sizes are also generally smaller than other big cities.
Although there are townhouse type complexes available, it is
rare to have a separate house. And in the case where they are
available the rent level reflects the exclusivity of the property.
Anticipate having something smaller than the country that you
are moving from.
Landlords often leave apartments in a terrible state until
a lease has been agreed. Once agreed the Landlord will typically
repaint, make sure all the air-conditioners are working, sand
and seal floors and generally clean the apartment. The landlord
may do other minor renovation depending on the price and terms
agreed.
New buildings, though offering superior bathrooms and kitchens,
are often much smaller in size than a similarly priced older
building.
New building generally also have many facilities such as pools,
gyms, shuttle buses, children’s play areas etc.
Older buildings are often better value and generally have
larger rooms and higher ceiling. The bathrooms and kitchens
are however, normally in poorer condition and few if any amenities
are provided.
Leasing Terms
Term of Lease
Lease terms are typically 2 years with a ‘break-clause'
that is exercisable at the end of the first year by giving
notice
in accordance with the lease agreement, (usually 2 to 3 months
notice i.e. total occupancy 14 to15 months).
Rent
Typically
the rent mentioned will be exclusive of management fee and
rates.
The rent level is set for the 2 year period of the lease,
although rates and management charges can change, normally
minimally. |
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Management
Fees
A management fee is charged on top of rent and covers the
cost of building maintenance, security and the general
upkeep
of amenities. The more amenities offered in a complex (e.g.
pool, tennis court, shuttle bus etc) the higher the management
fee will be. Management fees in older buildings are typically
considerably lower as few or no amenities are offered.
Government Rates
A government charge by the Rating and Valuation department
affecting all property, Government Rates usually amounts
to 5% of the rental.
Landlords typically pass this cost onto the tenant. Rates
are charged quarterly and payable in advance.
Utilities
Utility costs of phone, gas and electricity are payable by
the tenant and are put on in the name of the tenant.
Deposits
Initial Holding Deposit
Once the general terms of the lease have been agreed in an
initial offer letter an initial holding deposit is required
to be given to the landlord. The initial holding deposit
is one month's rent, management and rates. On the signing
of the
formal tenancy agreement this is used as the first months
rental. Typically, the holding deposit is refundable if
the
tenancy agreement fails to be signed. Iin some cases, howeer,
the holding deposit is forfeited.
Security Deposit
As in most countries the ‘security deposit’ is
held for compliance with the terms of the lease agreement.
Typically the security deposit is 2 – 3 months of the
total rental (i.e. rent plus rates plus management). It
is
often 3 months rental if the lease is a personal one rather
than by a company .
Legal Fees
Each party bears their own legal costs of reviewing the lease
agreement prior to signing.
Stamp Duty
The total stamp duty payable is shared between the landlord
and the tenant.
Agency Fee
The standard agency fee payable by the tenants is half of
one month’s rental.
Contact us at
info@habitat-property.com with any questions that you
have. |
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