HK expat wave reshapes real estate from boardroom to bedroom

Expatriate relocations to Hong Kong surged 20% y-o-y in 1H26, according to relocation specialist Dwellworks Hong Kong, with volumes expected to grow at least another 10% in 2027. Behind this rebound lies a powerful story: Hong Kong is reclaiming its position as Asia's premier financial hub, and the professionals arriving are reshaping both the office and residential leasing landscapes.

The revival of Hong Kong's IPO market has been the primary catalyst. IPO fundraising in the city led globally at HKD 285.8 billion in 2025, with momentum continuing into 1H26 at HKD 210.2 billion — second only to the Nasdaq. This surge has fuelled hiring across investment banking, legal, audit and compliance functions. New hires in financial services (excluding insurance) and professional and business services rose by about 5,300 in 2025, and the new hires in 1H26 alone already represent about 72% of last year’s total.

The second engine is wealth management. Hong Kong became the world's largest cross-border wealth management centre in 2025, with cross-border wealth of USD 2.95 trillion, edging past Switzerland. The increased hiring in financial services extended well beyond local talents. Last year, 2,343 financial services work visas were granted, which is the highest number since 2022. The momentum continued with 1H26 alone, such visas granted already reached 60% of last year’s total.

The location preference of new funds to set up in Asia in fact has totally revered from last year. In 2025 only three in 10 funds looking to set up in Asia chose Hong Kong. This year, about eight out of 10 are choosing the city.

This influx is fuelling real estate demand. Financial-sector expansion is fuelling Grade A office demand, particularly in Central, where banks, hedge funds and wealth managers are driving a flight-to-quality for trophy towers. In the first seven months of 2026, Central rents have increased by 8.9% and vacancy has dropped to a 49-month low at 8.0%.

On the residential front, expatriates’ housing demand is bidding up residential rents, which are already at record highs. In June 2026, the Rating and Valuation Department's Private Residential Rental Index reached 205.8, an 18.5% recovery from the pandemic trough, and has been breaking record for 19 consecutive months.

With vacancy rates remaining low and some serviced apartments converted to student housing, supply is tightening as demand accelerates. Luxury residential rents are forecast to rise about 5% in 2026, with momentum continuing into 2027.

Housing allowances reveal the economic muscle behind this demand. In investment banking, a one-bedroom allowance ranges from HKD 18,000–30,000 for early-career professionals to HKD 100,000–136,000 for top management, expanding about five-folds. In terms of industry, Investment banking commands the highest allowances, followed by retail, with technology firms generally at the lower end. Mainland Chinese firms tend to offer slightly lower allowances than multinational corporations. In terms of location, along with the abundant new housing supply in Kai Tak and Tseung Kwan O in recent years, these locations have been gaining traction adding to the traditional favourites like Mid-levels, Kowloon Station and East West Kowloon.
 

Figure 1: Typical housing allowance ranges by industry and seniority
(1-bedroom, single/married)

^{Source: Dwellworks}

The proposed carried interest tax exemptions announced in June 2026 should further strengthen Hong Kong's appeal to fund managers and investment professionals. For corporate occupiers, the message is clear: review housing allowances urgently, as stagnant budgets risk undermining talent attraction. For landlords, the supply-demand imbalance signals further rental upside, particularly for quality stock near international schools and office clusters.