In July, the Alternative Investment Management Association (AIMA) wrote to Singapore’s Monetary Authority with an unusual warning. Some of AIMA’s members — hedge funds and asset managers who had moved to Singapore during Hong Kong’s years of uncertainty — were having conversations about moving back to Hong Kong, in some cases within months. One unnamed global manager had seen its Singapore head count fall while its Hong Kong presence grew significantly: a reversal, AIMA said, of the position of only a few years ago. Last month, Susquehanna International Group, the US quantitative trading and market-making giant, tripled its Hong Kong office space — from under 20,000 square feet (1,860 sq meters) to more than 50,000 sq ft — to support a hiring push aimed at China’s fast-growing exchange-traded fund (ETF) market. These are not yet a trend. They are, however, a signal worth reading carefully.

The signal matters because it runs against a narrative that hardened from 2020 to 2022, when companies moved from Hong Kong to Singapore and the business press came to the conclusion that one Asian financial center was displacing another. The interpretation was understandable then. But it was wrong about what it was measuring. Companies moved faster than fundamentals did. The commercial machine did not break. Confidence did, albeit briefly.

Hong Kong’s asset management industry closed 2024 with HK$35.1 trillion ($4.47 trillion) under management — up 13 percent year-on-year, with net inflows rising 81 percent. The city recorded 1,510 regional headquarters in 2025 — a two-year consecutive increase and the highest since tracking began. Its profits tax, capped at 16.5 percent, remains among the most competitive in Asia. To the immediate north, Shenzhen and the wider Guangdong-Hong Kong-Macao Greater Bay Area provide a manufacturing and technology ecosystem that no Southeast Asian hub can replicate from a standing start. In February, the American Chamber of Commerce in Hong Kong found that 92 percent of multinational corporations in the city had no plans to relocate in the next three years — up from 78 percent two years earlier. The reversal in finance is not accidental. It reflects fundamentals that had never really departed.

Singapore earned what it gained. It offered political predictability and a crisis-free environment at precisely the moment Hong Kong looked uncertain during and after the 2019 riots. AIMA’s letter did not argue that Singapore had failed. It argued that the gap had narrowed enough for mobile professionals to start recalculating. That recalculation pointed directly at cost: property rents, school fees, individual taxation. In finance, at least, the flow is beginning to reverse — and cost is driving it.

Here is the structural difference that rarely appears in the comparison. Singapore’s private residential property prices have risen over 50 percent in the past decade, and Julius Baer ranked it the world’s most expensive city for high-net-worth lifestyles in 2026. Unlike Hong Kong, Singapore has no large adjacent territory it can develop to absorb housing demand. When costs become uncompetitive, Singapore has fewer spatial options, leaving tax and regulatory policy to carry more of the burden. That is precisely what AIMA was asking for in July, and what Singapore’s government scrambled to offer. Hong Kong, by contrast, has 1,700 hectares (17 sq kilometers) of developable land in the Northern Metropolis sitting right by Shenzhen — land resources that can be turned into affordable housing for the professionals the city is now winning back.

This leads the conversation to the variable that could determine whether this reversal lasts or stalls: the cost of housing a talented person in Hong Kong. Singapore’s private residential rents surged 29.7 percent in 2022, the largest annual jump since 2007, and companies were already subsidizing housing or relocating staff to cheaper cities by 2023. Rents have moderated since, but supply is expected to tighten again through 2027. In Hong Kong, two-bedroom apartments in central districts run HK$27,000 to HK$40,000 per month. Bloomberg noted that rents climbed to near-record highs in 2024, driven by student and expatriate demand. A senior hire negotiating a posting calculates quickly. The tax advantage is real. Part of it disappears into square footage.

Hong Kong has been slow to apply the same logic to its own housing, and treating it as a property market problem produces the wrong interventions. Treating it as a competitiveness problem — which is how the Northern Metropolis should be framed — produces a different set of questions, and for the first time in years, a credible answer to them.

The 2024 Policy Address committed to providing approximately 3,000 hectares of new developable land from 2025 to 2035, with 1,700 hectares in the Northern Metropolis. The strategic logic is sound: The zone will sit at the intersection of Hong Kong’s financial infrastructure and the Greater Bay Area’s industrial depth. The question is whether that land produces housing that mid-career international professionals can actually afford to rent — not merely units that satisfy a supply target on paper.

The risk is execution, and it is real. Transport links, tenure structure, eligibility rules, and construction pace all determine whether the Northern Metropolis becomes a genuine competitiveness lever or a decade-long planning exercise. The Northern Link railway is not scheduled to open until 2034. That timetable should concern anyone who believes the current momentum in finance is fragile. Mobile professionals make decisions on a shorter horizon than infrastructure departments. Hong Kong has a window. The window is not permanent.

Hong Kong has spent years asking what Singapore does better. The more interesting question now is whether Hong Kong can consolidate what it is already winning back — before the cost of a bedroom gives the advantage away again.

The author is a former investment banker turned tech journalist who writes about Asian business, technology, innovation, and capital markets. He previously worked at GE Capital and Korea Development Bank group.

The views do not necessarily reflect those of China Daily.