In the last couple of years, Hong Kong had remained relatively “closed” to the rest of the world. Once a vibrant city home to conferences and events, I think the city is bearing the brunt on the psychological and commercial front from reduced travel globally.

No one is making plans to get in, unless it was home. This was favorable from the perspective of a traveller as accommodation prices once considered to be incredibly high for Hong Kong, had plummeted significantly.

I had never given much consideration towards the amount of rent paid only until recently. As most of the world opens up, the return of overseas travel has led to steadily increasing airfares and hotel rates. When I returned to Hong Kong this year, I discovered that the lease on my place had gone up by about 30%.

Last year had been a tough period for Hong Kong. 14-day quarantines, tourist inflows from China taking a hit while businesses and residents were relocating away.

So this year, with the anticipation of the world re-opening up, I foresee that prices will continue to increase into next year.

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When I graduated from university, I had been one of the lucky ones that did not have to worry about paying the rent on my apartment. After amassing enough savings over 3 to 4 years, I made that decision to buy an apartment rather than renting one. Renting had never really been a consideration for me, maybe because being a resident in my own country, home ownership was the de facto option. Or at least it was so until I moved to Hong Kong last year.

From an economical standpoint, owning a place and servicing the mortgage payments work pretty much in the same way as rent with a few key differences.

Both rent and mortgage service are cash expenses, but the behavioural psychology behind paying the mortgage every month can be quite different from rent.

With regular mortgage payments, one takes some comfort in home ownership, knowing that your equity position generally improves with every month of debt repaid (assuming the value of your home doesn’t go down).

Property has generally been accepted to be a good store of value. While interest rates on a home loan can be as brutal as paying rent, with rent, cash out flow is basically a one way street. A sunk expense with no return on investment.

Rents remain much more sensitive to sudden price spikes driven by abrupt changes in supply and demand. Interest rates can be volatile but are insulated against market forces as the mortgage payments are largely priced and sized on your income.

To add on, it can be difficult to call a rented place home, especially if you do not have long term visibility of staying in that city. This uncertainty leads to a great deal of inertia when it comes to upgrading your living conditions.

Therefore, to an immigrant, the bottom line is everything i.e. the less I pay in rent, the more I bring home in cash.

While I consider myself middle-class and one of the more fortunate and relatively better-placed immigrants, I can totally feel what it is like to be an outsider alone in a foreign country earning a living, setting aside as much as possible every month with the end goal of going home one day.