Even before COVID-19 was declared a pandemic in March 2020, Hong Kong was already in crisis with pro-democracy street protests, curfew rumours and disruptions to commuters due to the controversial extradition bill of 2019.
At the time, Bloomberg reported a surge from anxious expatriates sizing up schooling options beyond the former British colony to send their children to. This included enquiries on placements in international schools like the Singapore American School and the Canadian International School in Singapore.
Two years later, with COVID-19 restrictions like the zero-COVID-19 policy (and lengthy school shutdowns) frustrating many local and foreign Hong Kong residents, the enquiries seem to have increased. A follow-up Bloomberg report cited that a net 71,000 people have left Hong Kong in February 2022 – the biggest outflow since the pandemic began.
Singapore-based international schools like Tanglin Trust School and EtonHouse International School were reported to have received an increase in inquiries from parents in Hong Kong.
Serviced apartments provider, Ascott Ltd., which operates luxurious apartments at Ascott Orchard, Citadines Mount Sophia and Lyf One-North, was reported to have been fielding more enquiries, including from Hong Kong, since January.
In March 2022, Financial Times reported that some international schools in Singapore received more inquiries from Hong Kong residents than usual but were unable to meet the unprecedented demand.
The report cited Singapore-based Tanglin Trust School, a non-profit with 2,800 students and annual fees of up to S$46,965, receiving as many applications in January and February 2022 compared to the whole of last year.
Similarly, the Canadian International School, which has 3,200 students across two campuses in Lakeside and Tanjong Katong (and charges fees of up to S$41,700 a year) received seven times more inquiries in 2022 than in the previous six months.
What type of residences are they looking for
“Based on agents’ feedback, we received more enquiries from clients in Hong Kong. They are keen to rent or buy homes as they plan to work in Singapore in the mid to long term. Some are Singaporeans shifting back to Singapore while others are expatriates who were working in Hong Kong and are being relocated here,” said Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie.
Some of the clients Sun talked about are looking at the luxury home segment or prime location. Others may be looking at city-fringe homes that are near the CBD.
“There is a mixture of clients – those moving over with their families and others who are single, business executives. I think most of them would be looking at the same factors as other foreign buyers such as political stability, safe country, business friendliness, and their ability to adapt to our culture and language,” she added.
While the enquiries and interest have increased, it does not necessarily mean that the resident’s plan to migrate to Singapore would succeed or have materialised.
According to Sun, there has not been a significant increase in buyers from Hong Kong over the past few months. However, she shared that some may have bought homes and the caveats logged under ‘China’ or ‘foreign (unspecified)’.
New non-landed homes bought by PRs and Non-PRs
| Nationality by Country | 2020Q1 | 2020Q2 | 2020Q3 | 2020Q4 | 2021Q1 | 2021Q2 | 2021Q3 | 2021Q4 | 2022Q1 |
| Hong Kong | 3 | 1 | – | 1 | 3 | 2 | 5 | 4 | 1 |
| China | 92 | 53 | 95 | 95 | 175 | 156 | 128 | 130 | 41 |
| Foreign (Un-specified) | 126 | 135 | 238 | 151 | 187 | 144 | 112 | 155 | 205 |
Source: URA, OrangeTee & Tie Research & Analytics
“Singapore is seldom the first choice for Hong Kongers seeking migration. In the past year, however, there has been an increase in Hong Kongers moving here for a short period to avoid COVID restrictions in their country. Most of them tend to rent a place for a short while,” said Lee Sze Teck, Senior Director (Research) from Huttons Asia.
“However, there was a jump in the number of Hong Kongers buying properties in the past year. In 2020, there were 27 homes bought by Hong Kongers. This increased by 40.7% to 38 homes in 2021.
“The first and foremost consideration is getting a loan to buy a home in Singapore. Most if not all, will not be able to obtain a loan in Singapore. They will probably have to sell their home in Hong Kong to finance their purchase here. The next consideration is the size of the home. They will want a home much larger than their Hong Kong home,” Lee said.
It is entirely possible that some Hong Kongers’ rent-first-settle-down-later approach could have contributed to our month-to-month increase in our rental market.
“The private residential rentals continue to increase strongly in 1Q 2022. The overall residential rental index increased by 4.3% QoQ last quarter. On a year-on-year basis, the rental index rose 12.1%. This is the first time in eleven years that the annual growth of the rental index reach a double-digit percentage,” said Nicholas Mak, Head of Research and Consultancy from ERA Realty.
Besides healthy domestic demand and the spillover effect from the recently increased Additional Buyers Stamp Duty (ABSD), Mak also attributed the rental increases to the economic recovery and border reopening, which ‘led to more workers returning to Singapore’.
Of course, while most Hong Kong residents are renting, making inquiries, researching and deciding whether to invest in property long-term here to settle down, there are two other major factors that may delay or reverse their plans completely.
1. Parents risk losing their children’s school debentures if they cannot sell them in the secondary market
In Hong Kong, parents have to pay debentures, a form of advance loan to secure priority admission into international schools.
Ranging between US$10k to US$10m (for top international schools) per child, a parent who decides to relocate their child out of the school to another school (eg. Singapore) risks losing his or her debenture.
Some school debentures are refunded in full once the child completes his or her education while others may not or see them depreciate to zero over time.
This means parents caught in between having their child drop out of school midway have to find a willing debenture buyer in the secondary market (usually through a brokerage agency).
It’s a tough call, especially if they’ve prepaid a high debenture. With the recent news that Hong Kong may allow in-person classrooms to resume in stages from mid-April, some parents may change their minds and return to Hong Kong instead.
2. Challenges in securing visas and employment pass
A Bloomberg report in April shared another reason why foreigners intending to move from Hong Kong to Singapore had to do a U-turn (or look elsewhere).
While it seems that Singapore should be the obvious choice for Asia’s top finance hub besides Hong Kong, strict visa requirements and hiring restrictions have hampered the influx of bankers intending to move here.
It shared one example of a European bank with plans to designate its Marina Bay financial district office as the backup centre for Hong Kong (so it could relocate staff to Singapore). Unfortunately, some bankers and hedge fund managers are already having second thoughts.
As Singapore continues to push for its ‘hire local’ policy, it will also be making it progressively stricter for foreign talent when it comes to having their visas or employment passes approved.
One such move was the increase of the minimum monthly salary threshold for Employment Pass (EP) and S-Pass applicants from September this year. For example, EP applicants’ minimum salary threshold will go up from S$4,500 to S$5,000 (S$5,500 for the financial sector).
There’s also the Complementarity Assessment Framework (COMPASS) points system due to start in September 2023. This is where EP applicants are rated based on various criteria, ranging from salary to skills and qualifications, and the hiring firm’s diversity and support for local employment.
These restrictions have prompted some of these firms to look farther, such as Dubai, London or Sydney, as possible relocation destinations beyond Singapore.
“If Hong Kongers move to Singapore, their main concern is how and whether they have a job here and whether they can get PR status in Singapore. They need to have a job here to get an Employment Pass, S-pass or work permit,” shared Mak.
Mak added that they are likely to wait until they get their Singapore PR status before buying a property in Singapore.
The cooling measures announced in December 2021 require that foreigners pay 30% Additional Buyers’ Stamp Duty (ABSD) for any property purchase (including their first). Singaporeans and PRs pay 0% and 5% ABSD respectively for their first Singapore-based property.
So it’s highly possible that many Hong Kong residents – while inquiring about or renting in Singapore – are waiting for the right time or circumstance, before making these life-changing decisions for their families and themselves.
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Are you a Hong Kong resident with plans to migrate and rent/buy a property here in Singapore? Let us know in the comments section below or on our Facebook post.
If you found this article helpful, 99.co recommends Condo, terrace house or HDB? Housing considerations for foreigners when moving to Singapore and Will Vaccinated Travel Lanes (VTL) invite more foreigners to buy CCR condos?
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