Hong Kong’s high rents create a new type of cross-border commuter
Published Wed, Jan 24, 2024 · 7:16 pm
A growing number of young white-collar professionals are trading expensive, cramped quarters in Hong Kong for less pricey and roomier digs in Shenzhen (top).
MONDAY to Friday, Emma Leng wakes up at 7.50 am in her bright two-storey, two-bedroom loft in Shenzhen and arrives at her desk at a medical company in Hong Kong by 9.30 am. Her commute is about an hour door to door, thanks to an expanding network of trains connecting the two cities.
The 29-year-old is among a growing number of young white-collar professionals trading expensive, cramped quarters in Hong Kong for less pricey and roomier digs in Shenzhen, a sprawling city some 17 miles north that’s often tagged the Silicon Valley of China. Additional perks include cheaper, round-the-clock food delivery options and cleaner air.
On China’s Instagram-like app Xiaohongshu, posts with the hashtag “#ShenGangTongQin,” which translates to “Shenzhen-Hong Kong-Work Journey,” have surged since the middle of last year. Posters dispense tips on how to navigate relocation logistics, from apartment hunting to the best takeout dinner options. Leng, who writes about her experience on the app, says she’s built up a larger following and is constantly replying to direct messages.
“It took some time getting used to, but having done this for more than six months now, I have found a nice balance,” says Leng, who lived in Hong Kong for about six years before moving to Shenzhen in May. “There’s a wide range of people around me doing this and asking about it–many people in the financial field, students, and even families who have moved from Hong Kong to have bigger spaces for their children.”
Behind the growing appeal of the commuter lifestyle are a number of factors, including improvements in transportation options and the greater prevalence of remote work. What for many used to be an exhausting 90-minute trek that often involved a combination of bus, subway and ferry transfers has become a half-hour trip in a comfortable, air-conditioned bullet train with assigned seats and rare delays.
A high-speed rail link between Hong Kong’s West Kowloon Station – near the offices of international financial companies such as Morgan Stanley and Deutsche Bank – and Shenzhen’s financial centre, Futian, opened toward the end of 2018. Service was halted at the start of the pandemic but resumed in January of last year.
In addition, commuters can use the newly extended East Rail Line that connects central Hong Kong and Shenzhen via the Lo Wu crossing. Since Hong Kong is separated from the Chinese mainland by a border, commuters need to clear immigration checkpoints on both sides, normally a quick process.
Also driving the trend is the sharp increase in Hong Kong rents. That’s caused, in part, by an influx of mainland nationals, a result of new visa policies aimed at attracting talent. The government last year issued some 44,000 visas to mainland nationals under its Top Talent Pass scheme, which grants entry visas to graduates of the world’s top 100 universities.
Leng pays about US$836 a month for her 65-square-metre two-bedroom flat in Shenzhen, US$700 less than what she paid for the one-bedroom, 29-square-meter place she had in Hong Kong. Rents in Shenzhen run at about 108 yuan (S$20.22) a square metre per month, less than a third of Hong Kong’s prices.
Cathie Chung, senior director of research at Jones Lang LaSalle in Hong Kong, says there’s anecdotal evidence that more Hong Kong residents, especially those with jobs that allow some remote work, are choosing to live in Shenzhen. The property management firm’s latest Greater Bay Area report notes that more Hongkongers are investing in property in Shenzhen, and the number of those buying homes for their own use has increased from pre-pandemic levels.
Yet Chung points out that relocating to Shenzhen isn’t an appealing option for those who work in Hong Kong’s major commercial districts, such as Central, that are farther away from the border. Parents who have school-age children might also hesitate to make such a move.
The growing ranks of commuters – who, like Leng, are mostly mainland nationals – usually still qualify for Hong Kong’s low income-tax rate: The highest level is 15 per cent, compared with the mainland’s top rate of 45 per cent. An individual is regarded as a Hong Kong resident if he or she spends more than 180 days there in an assessment year, among other considerations, the Inland Revenue Department said in an email. While China moved to tax the global income of its citizens in 2020, the government has yet to enforce it stringently across the population, and individuals can claim tax credit in Hong Kong under a double-taxation-avoidance arrangement if the same income is taxed on the mainland.
One issue of concern for those contemplating a move to Shenzhen is policy vagueness about whether this could affect their chances of obtaining a coveted Hong Kong permanent residency. The eligibility criteria include having “ordinarily resided in Hong Kong for a continuous period of not less than seven years.” In response to an inquiry from Bloomberg News, the immigration department in Hong Kong said whether a person is considered an ordinary resident is determined by circumstances and reasons for absence, including whether he or she has habitual residence in Hong Kong.
Despite the gray areas, the lure of Shenzhen’s low rents is difficult to resist. Ice Lian, a 31-year-old media executive, was sharing a flat with two others in Hong Kong and paying US$830 a month. In August, she moved to Shenzhen’s Futian, and now she has a flat to herself for the same price.
Her after-work routine involves ordering dinner and groceries while riding the train home, so they’ll be waiting on her doorstep when she arrives. “We can use better prices to lift the quality of our lives and living environment,” says Lian. “The number of transport routes between Shenzhen and Hong Kong is also growing, so even if my office location becomes farther from the checkpoints, I will try my best to continue this lifestyle.”
Then again, not everyone is cut out for the commuter lifestyle. Eve, a media executive who wanted to be identified only by her first name, moved back to Hong Kong after three months of living in Shenzhen. Travel difficulties during a spate of bad weather last year, queueing at customs when mandatory health declarations were still in place, and her office relocating led her to return to Hong Kong.
“The hassle and tiredness of it is not for everyone,” she says. “One must weigh various factors carefully such as your health, job location and actual cost savings.” BLOOMBERG
