IT'S a common refrain from property agents these days, but one that irks flat-hunter Shen Man Yan.

'Better view that apartment soon or risk losing it to someone else,' they would advise Ms Shen, a 31-year-old lawyer who is looking for a flat in Happy Valley, a prime district for professionals and expatriates.

'I don't know if that's a marketing ploy, or if the market is really that hot, but I hate it when I hear that,' she said.

Analysts say it is a combination of both factors, with housing rents for professionals and expatriates here now among the priciest, if not the priciest, in the world.

Add that to similar double-digit rental increases over the past year for office space - bolstered by the promise of more mainland investment funds - and the city's property industry looks pretty rosy.

A recent report by human-resource specialist ECA International showed that the cost of renting an expatriate apartment in Hong Kong is the world's highest, at an average of US$8,592 (S$13,000) a month.

The figure was 17 per cent higher than for Tokyo, which ranked second, and 150 per cent over that in 15th-placed Singapore.

According to Mr Lee Quane, ECA general manager in Hong Kong, apartment rents in executive districts such as the Mid-levels and Happy Valley have jumped 25 per cent over the past two years.

The main reason for the spike is a limited supply of homes in the top districts.

A similar situation exists in the office space market, where a 17-year-low vacancy rate is pushing up prices in the prime Central district on Hong Kong Island.

US giant Morgan Stanley, for one, is said to be considering moving some operations from its Central address - traditionally de rigueur for the financial services trade - to less expensive Kowloon on the other side of Victoria Harbour.

Rents in the Kowloon hub of Tsim Sha Tsui average about HK$30 (S$5.80) per sq ft (psf) to HK$40 psf - less than half of the HK$90-HK$100 psf in Central.

For now, such increases in housing and office rents are hardly denting Hong Kong's ability to attract investors. The city's gross domestic product is expected to grow by 5.5 per cent this year.

One reason, noted Ms Karen Choi, research head of property firm Vigers, is that the average cost, while high, remains about 10 per cent off the peak in 1997 before the economy was ravaged by the Asian financial crisis and 2003 Sars outbreak.

'Also, prices everywhere from Singapore to Shanghai are rising too,' she told The Straits Times.

Said Mr Quane: 'In the future, more companies will certainly consider moving to Shanghai, where housing costs are 50 per cent lower.

'But then, tax rates there may also run as high as 45 per cent, which could prove just as costly for firms that pay taxes for their employees.'

The next logical option, he added, would be Singapore, which shares Hong Kong's attractive tax regime but not its physical and political intimacy with China.

'Hong Kong remains, for now, worthwhile for the large multinationals despite high property rents,' Mr Quane concluded.

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