Living Costs in Hong Kong: A Comprehensive Guide

The cost of living in Hong Kong is often considered high, especially with regard to housing and rental prices. However, it's important to note that this can vary greatly depending on individual lifestyles and choices. This comprehensive guide delves into various aspects of living expenses in Hong Kong, providing a realistic and detailed overview for expatriates and newcomers.

Rough Estimates for Living Costs

The estimated annual living cost in Hong Kong varies based on the number of individuals in the household. For a single person, the annual expense to live in Hong Kong can be around HKD 150,000, which includes rental or shared condominium costs, electricity, water, liquefied petroleum gas, food, clothing, and incidentals. For a couple, the cost can range from HKD 200,000 to 250,000, depending on their lifestyle and needs.

Factors Influencing Living Costs

Living costs in Hong Kong are not uniform. One of the significant factors is the number of people living in the household, particularly the presence of children. The absence or presence of children can greatly affect the overall budget. Additionally, the type of accommodation and lifestyle choices play a crucial role.

Headcount and Budgeting

The primary difference in a budget is the presence or absence of children. Schools in Hong Kong, especially international schools, are extremely expensive. Local schools might not be accommodating for non-English speaking parents, leading to the imposition of higher expenses for international schooling. For a couple without children, the living costs can be more manageable, provided one spouse is on a dependent visa.

Real Estate and Housing

Real estate and housing costs are among the most significant expenses in Hong Kong. For a single person, a flat of around 500 square feet costs around HKD 13,000 per month. However, the cost of housing has increased significantly over the years. For instance, a flat I used to rent for HKD 10,000 now rents for over HKD 30,000. This highlights the inflation in real estate prices.

Living in the heart of Hong Kong vs the suburbs can also make a huge difference in housing costs. For example, someone living in Tung Chung near the airport might pay 10,000 HKD for a 1200 square feet apartment, which now rents for more than 30,000 HKD. Alternatively, if one opts to live in a more affordable area, the housing cost can be significantly lower, around 2,000 to 3,000 HKD per month, but with limited facilities.

Transportation Costs

Transportation in Hong Kong is both convenient and cost-effective. Public transportation is well-organized, with the Mass Transit Railway (MTR) and Light Rail Tramway (LRT) covering most areas of the city. Even with the convenience, the transportation cost is minimal, adding only a few USD per day. For instance, a bus fare to get downtown might cost around 2.1 HKD, making it incredibly affordable.

Food Costs

While dining out in upscale restaurants can be pricey, eating out in local and even some expatriate-friendly markets in places like Central or Wanchai might not break the bank. Overall, the cost of food in Hong Kong is quite manageable. Supermarket options like Park’n’Shop offer a variety of imported food, including French and Asian cuisine, making it convenient for expatriates.

Taxation

Income tax in Hong Kong is relatively low. For a single earner, the tax rate on the first tranche of income is 12%, and 16% on anything above that, provided there are deductions for a spouse, non-working children, etc. This means that unless you are in the upper income bracket, you are unlikely to pay more than 10% in income tax.

When budgeting for living in Hong Kong, start with your income and allocate a significant portion of your salary towards real estate, ideally no more than 50% for a single earner or 50% of the higher salary for couples. If you have children, deduct school fees first, then assess the housing budget accordingly.

Many couples and families in Hong Kong manage with around HKD 25,000 per month, although this may not allow them to save much. Any additional income above this is considered extra.