Hong Kong residents flock to Singapore and buy rental houses

SINGAPORE — After eight years in Hong Kong, Jonathan Benarr is giving up that city for a new set of attractions: in Singapore.

“Hong Kong was always a fun place to be,” he told CNBC. “Singapore was the place to go if you were a little bored or had a family.”

“Well, fast forward [two years]Singapore is a shining light,” he said. “You just reopened the bars and the clubs, and people are being treated like adults.”

Smothered by tight Covid restrictions in Hong Kong, some residents of the Chinese financial hub have moved to Singapore and there are signs that rental demand has increased.

Rents for private homes rose by 4.2% in the first quarter of this year, compared to a rise of 2.6% in the previous quarter, according to the Urban Redevelopment Authority.

“Anecdotally, we know that maybe some of those who live in Hong Kong are looking to move to Singapore, and this is contributing to rising rents,” said Leonard Tay, head of research at real estate agency Knight Frank Singapore.

To be clear, interest from Hong Kong is not the only reason for rising rents. Rental prices in Singapore were already rising during the pandemic due to demand from various sources, including young adults moving out of their parents’ home and people looking for temporary housing due to construction delays.

In Hong Kong, people arriving must quarantine for at least seven days in a hotel and take multiple Covid tests.. Singapore, however, has gradually eased quarantine requirements since September. since Tuesday, vaccinated visitors will no longer need to take any Covid tests.

“[Hong Kong] it just feels backwards,” said Benarr, who is group director of real estate at hospitality company The Mandala Group.

“What was once a progressive city seems to no longer be interested in being part of the international conversation,” he said.

The Briton is currently packing up his apartment in Hong Kong and moving to Singapore permanently.

In response to CNBC’s request for comment, the Hong Kong Information Services Department noted a CEO Carrie Lam’s speech at the end of Marchwhere he said Hong Kong needs to balance virus risks and Covid measures.

This is to “allow the city to continue to address Hong Kong’s social and development needs and the individual circumstances of our people,” he said.

“We couldn’t be too harsh on our people, and people’s tolerance has always been one of the factors we need to consider when designing the best public health measure for Hong Kong.”

Visitor arrivals from Hong Kong to Singapore nearly doubled from January to February this year, According to the Singapore Tourism Board.

That number increased even more in March, jumping more than 110% from February, show the official data.

Some of the new arrivals intend to settle in Singapore and have turned to co-living spaces or serviced apartments, according to industry players.

Hmlet, a Singapore-based co-living startup, said there was an “exponential” increase in bookings in January 2022, “which we attribute to demand from Hongkongers who anticipate the imminent tightening of public health protocols.”

Hong Kong inquiries increased 25% from December 2021 to January 2022, Hmlet said.

“The pace of bookings from Hong Kong slowed slightly in February and March, but remained higher than in previous months,” said Giselle Makarachvili, the company’s chief executive.

Hong Kong has a dynamic zero strategy for Covid and imposed strict measures from January in a bid to curb the spread of the viruswhich included a ban on dining after 6:00 p.m. every day.

The city further tightened restrictions in February, though they were slightly eased last Thursday.

Serviced apartments managed by Far East Hospitality also saw an increase in inquiries and bookings in late February, though that has slowed since then, the company told CNBC.

“Interestingly, we also noticed a group of members whose original intention of traveling was for business but eventually turned into permanent stays,” Makarachvili added.

Around 70% of bookings from Hong Kong at Hmlet Homes were for stays of three months, the minimum required. The remaining 30% of bookings were for longer stays between six and 12 months.

About 80% of Hong Kong Hmlet Homes’ customers are families with young children, added the chief executive.

Far East Hospitality has received a mix of bookings, both from travelers and businesses seeking temporary accommodation for their employees, according to Tan Chia Hui, chief operating officer of hotels and serviced residences.

Corporate bookings are typically for a period of one to three months, and for larger units with between two and four bedrooms, he added.

“This indicates that while guests may be moving for work, they are also looking to bring their families,” he said.

Joint venture company WeWork said its Singapore locations saw a nearly 13% increase in sales and inquiries from Hong Kong-based companies in the fourth quarter of 2021 compared to the third quarter.

JustCo said it hasn’t seen a substantial increase, but international financial institutions in Hong Kong are looking for flexible workspaces in Singapore.

Another Singaporean, who just wanted to be known as Leung, said he bought a one-way ticket to Singapore when Hong Kong announced in February that it planned to carry out three COVID-19 tests on its entire population.

He said that at the time he felt that “the government [had] I totally lost it, I have to get out of here.”

Some Singaporeans were also motivated to return to visit their home country to see family and friends.

A Singaporean, who works in finance in Hong Kong and declined to be identified, said it was a good opportunity to visit loved ones, especially as the Chinese city’s Covid situation worsened earlier this year.

She said her friends used Singapore as a base for short-term business or personal trips to the US and Europe, as Singapore does not require fully vaccinated travelers to quarantine.

Leung regularly crosses the border into Malaysia to visit his family, which would not be possible if he were in Hong Kong.

Starting Thursday, Hong Kong began allowing groups of four to gather at any time and restaurant opening hours were extended until 10 p.m.

But that “is not something to celebrate,” said Leung, who works at a financial institution and returned to Hong Kong in April.

In Singapore, limits on social gatherings have been removed and social distancing is no longer required. Authorities also recently lifted the 10:30 p.m. limit on alcohol sales and allowed bars and karaoke parlors to reopen again.

It’s great that Hong Kong’s rules are less extreme, but there are still a long way to go, Leung said.

“If this continues in Hong Kong for, I don’t know, next year, I think it will be a strong enough reason for me to leave,” he said.

The Singaporean who works in banking and stayed in Singapore for a month said he doesn’t plan to leave Hong Kong right away, but Covid and political turmoil in the city have made him think about his long-term plans to stay.

“In the past, maybe I could have entertained… stayed long enough to be a Hong Kong.” [permanent resident]but for now, I think with the current situation, it’s unlikely that I will,” he said.

Similarly, Leung said he is in no rush to return to Singapore, but is open to the idea.

“If something comes up, the numbers are right, it aligns with my career goals, why not? It’s a good time to move,” he said.