For most foreign financial market professionals in Hong Kong and across Asia, the days of extravagant expat life have ended — for now at least.
The standard HK$200,000 (US$25,641) per month housing allowance for top bankers is gone or going in most cases.
Paid-for chauffeurs to tote executives and their families around the steep hills of Hong Kong are scarcer, as are free memberships to exclusive country, golf or dinner clubs that may otherwise cost more than HK$2.1 million to join.
PHOTO: REUTERS
Free private school education for the kids, roughly US$10,000 per child at international schools, is being scaled back too.
Corporate ships for cruises around Hong Kong’s myriad beaches are being auctioned off.
Many banking executives from Wall Street and Europe still live a life of luxury in Asia, but for others, the expat life of perks is a fading phenomenon.
“Those kinds of packages will not be offered to the extent they were in the past,” said Paul Lucas, vice president for real estate at Pricoa Relocation.
Starting last December, Morgan Stanley, like other Wall Street banks, began rolling housing benefits into salaries.
Hong Kong’s band of elite property agents, meanwhile, are rubbing their wounds.
“My record was a HK$320,000 [rent per month] mansion ... with a full sea view,” said a property specialist surnamed Lai who’s helped expat executives find luxury homes for the past 13 years.
“Recently though, we haven’t done many deals — only those around HK$100,000 [rent per month],” Lai said.
Residential rental prices dropped, by some estimates, more than 30 percent earlier this year.
HSBC sold its junk boats several years ago but still owns bungalows throughout the region for off-sites and weekend getaways for employees.
The size of housing allowances in Hong Kong may not seem like much for people within the financial industry, but for those outside it, the numbers look staggering.
But things are changing. While the shift may not be public, its trail is evident.
In the last six months, bankers have been moving from palatial flats to more modest abodes, or relocating to less exclusive and cheaper districts.
“What we’ve seen amongst some financial institutions is that they’ve changed their benchmarks,” said Lee Quane, the Asian director of ECA International, which advises on expatriate packages and allowances.
He estimates that the average price for a three-bedroom apartment in Hong Kong in a mix of expat areas was around HK$90,000 per month last year and this year.
Lavish perks add up.
“Benefits can sometimes be up to about two times more than the base salary of the employee for Hong Kong,” Quane said.
In addition to housing and school allowances, business-class air travel and free trips home used to be a given for expats at Hong Kong financial institutions.
For some, overseas packages even included membership to fancy recreation clubs like the Aberdeen Marina Club, where memberships can cost HK$2.1 million.
The pull-back in perks is, not surprisingly, being met with some resistance. But given the extremity of the global financial crisis, a crisis fueled in large part by banks taking on too much risk, people are generally understanding of the new policies.
“They’re being backed into a corner. They don’t like it, but there’s nowhere to go, there’s no alternative,” said a US fund manager and former banker, who asked not to be named.
“Firms are saying we need some of your skin in this game as well,” the fund manager said.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
RSS