Expat relocations to Hong Kong up 20% in 1H26 drives residential rental growth

HONG KONG, 25 August 2026 – Expatriate relocations to Hong Kong handled by relocation specialist Dwellworks Hong Kong increased 20% year-on-year in the first half of 2026. Relocation activity is expected to grow by a further 10% in 2027. The additional demand is likely to support further growth in Hong Kong's already record-high residential rents, with luxury residential rents forecast to rise by about 5% this year and continue increasing in 2027, according to JLL's latest Hong Kong Residential Sales Market Dynamics released today.

Joyce Lam, Director of Operations at Dwellworks Hong Kong, said: "The volume of relocations we handled increased steadily between 2023 and 2025. However, relocation initiations surged 20% year-on-year in the first half of 2026. While overall volumes remain below pre-pandemic levels, the pace of growth is the strongest seen in the past three years. Our data show that most relocation initiations originate from the financial sector. In terms of geographic origin, finance-sector transferees typically relocate from Europe and the US, with additional demand coming from Singapore and Japan. Relocations within the retail sector are primarily driven by assignments from Europe, while arrivals in the technology sector are mainly from mainland China and have been gaining momentum since 2H25. We expect relocation demand to increase by at least 10% in 2027,"

The influx of expatriates has boosted demand in Hong Kong's residential leasing market. The Rating and Valuation Department's Private Residential Rental Index reached 205.8 in 2Q26, representing an 18.5% rebound from its pandemic-era low of 173.6 in 1Q23. This marks the first sustained period in which the Index has remained above the 200 threshold.

Norry Lee, Senior Director of Projects Strategy and Consultancy at JLL in Hong Kong, said: "One of the key drivers behind the increase in expatriate arrivals has been the revival of Hong Kong's IPO market. The surge in fundraising activity has fuelled hiring demand across investment banking, legal, audit and compliance functions. According to the Census and Statistics Department, employment in the financial services sector (excluding insurance) and professional and business services sector increased by approximately 5,300 to 550,800 in 2025, and rose by a further 3,800 to 554,600 in 1H26."

Another key driver is the expansion of Hong Kong's wealth management sector. Hong Kong became the world's largest cross-border wealth management centre last year. The number of financial services visas granted to foreign nationals rose to 2,343 in 2025, the highest level since 2022. The momentum has continued into 2026, with 678 visas issued in the first quarter alone, equivalent to around 29% of the previous year's total. The sustained influx of talent is underpinning residential leasing demand and placing further upward pressure on rents.

Newly arrived expatriates typically choose where to live based on three key factors: proximity to their workplace, access to international schools and budget. Most of them prefer to reside within a 30 to 45-minute commute of their office. As more companies set up spread to East Kowloon and West Kowloon over the last few years, expatriate housing demand is more geographically diverse. While expatriates have traditionally concentrated to reside in areas such as Central/Soho area, and nearby in Kowloon Station, South West Kowloon, Discovery Bay and Tung Chung, demand is increasingly shifting towards districts including Kai Tak and Tseung Kwan O, particularly for newer residential developments, penthouses and townhouses. In contrast, Discovery Bay and Tung Chung have become less popular than in previous years. Sai Kung and Repulse Bay are also favoured by expatriates, supported by their proximity to leading international schools.

In terms of housing budgets, using one-bedroom accommodation allowances in the investment banking sector as an example, budgets can increase more than fivefold between the lowest band, typically allocated to early-career employees (HKD 18,000-30,000 per month), and the highest band for senior management (HKD 100,000-136,000 per month). Investment banking offers the highest housing allowances, followed by the retail sector, while technology companies generally provide lower budgets. Mainland Chinese firms also tend to offer slightly lower housing allowances than multinational corporations. Within each employee grade, budgets may vary depending on household size, with the maximum allowance for a four-bedroom residence typically around double that of a one-bedroom unit.

Cathie Chung, Senior Director of Research at JLL in Hong Kong, added: "The proposed carried interest tax exemptions announced in June 2026 are expected to strengthen Hong Kong's appeal to fund managers, family offices and investment professionals whose remuneration includes carried interest or performance-based fees. The resulting inflow of senior finance professionals and high-net-worth individuals is likely to support demand for luxury residential leasing. On the supply side, however, some serviced apartments have been converted into student accommodation and are no longer available for expatriates. At the same time, vacancy rates in the residential leasing market remain low. This is likely to intensify competition for high-quality housing stock, with implications for occupiers, relocating professionals and landlords alike. We forecast luxury residential rents to increase by around 5% in 2026, with the growth momentum expected to continue into 2027."

"Corporate occupiers should review housing allowances as a matter of priority, as stagnant budgets risk undermining talent attraction and retention in an environment of rising rents. Relocating professionals should begin their property searches early and remain flexible on location preferences amid increasing competition for well-located accommodation. For landlords, the widening supply-demand imbalance is expected to support further rental growth, particularly for high-quality properties near international schools and major office clusters,” said Lam.