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On the other hand, there are certain areas that are family-friendly and fantastic for those with kids. Check out the South Side of the Island (Discovery Bay or Sai Kung). These suburbs, of sort, kind of have an artificial feel to them and they do come with longer commutes for parents that work in the city centre, but they also afford expats more living space and an escape from the frenzied pace of the Hong Kong CBD. They're heavily favoured by expats though, so if you're looking for more local integration they won't be the best area to settle.
One part of Hong Kong that is exceptionally child-friendly is the education system. There's a wide selection of internation schools and, overall, the standard is fantastic. American schools and British schools feature most prominently, but there's also other alternative education options as well.
However a lot of people, ex pats included, raise kids here happily.
You need to pick location carefully as Stephanie says. Discovery Bay is on Lantau Island and Sai Kung is on the New Territories Side. Both are a bit more open air and have more space. Discovery Bay comes complete with Ex Pat communtiy while Sai Kung is a little more local in feel. If you will be communting to Central for work then you need to be prepared to travel a bit further each day to have a home with a semi spacious and airy feel. There are other areas that provide this too, so look at all the options.
There a lot of easy hiking and walking in HK which is perfect for young kids, the beaches are safe and well maintained and the schools are excellent. You will have to pay for the International Schools and it is not cheap, so this is something you need to research carefully before you move.
You can definitely make it work here for kids and the opportunities for them to experience something different and learn from the environment around them make it worthwhile I think.
Please do get in touch if you would like more information.
Norma