The High Cost of Living – Hong Kong Now

I was in Hong Kong for 4 days this week for a business trip. The last time I was there, it was 2 years ago for a family vacation where we ate our way through all the great eating places over 4 days.

For this trip, I stayed at Marco Polo in Harbour City/Kowloon and took a daily ferry ride across the waters to the business district every day to reach the office. It was a nice way to get to work and the ride was incredibly cheap at HKD 2 only (USD 1 = HKD 7.76).

Other than the ferry ride, I was amazed that things in HK were so expensive now! One good indicator was the cost of food. Every meal I had was at least HKD 100. Even in the cheap run down mom and pop, hole in the ground eating places that I like to frequent in Kowloon had all jack up prices in general. We had a corporate rate for the hotel and it was already HKD 1,500/night. I was told that the sandwich shop Pret-A-Manger (at the IFC mall where I grabbed lunch during my time in HK) had  a monthly rental of at least HKD 500,000 per month! Can you imagine the number of sandwiches you have to sell?

It seems that HK property prices since 2009 had doubled and only 50% of the population owns a property. Public housing is almost impossible to find and this sector has been controlled by the big 4 firms over the years. No wonder the general population is unhappy and protests are getting more common. The younger generation is disillusioned and most are contemplating leaving the country, a feeling of desperation and hopelessness being felt. The opposition parties are trying to have their voice in parliament, though I disagree with their methods.

I thought that S’pore was already expensive nowadays, but my short trip to HK this week made me realize that it was worse in other countries like HK. The developed countries may say that their economy is in a deflationary cycle, but their loose monetary policies are wrecking havoc on the rest of the world, causing asset bubbles in emerging market and exporting inflation to all the developing economies. How all this will end is anybody’s guess. Will it end badly with a bang or will it again be swept under the carpet for the next generation to worry about as we kick the can down the road???