Hong Kong has been named as the most expensive city in the world for expat renters, according to new research.
Data provided by international ECA International, rental costs in Hong Kong remain the highest in the world, despite the fact that the cost of renting property in the city had called between 2 and 3 percent over the past twelve months. According to research produced by the human resource company, the typical cost of renting a three bedroom unfurnished apartment averages US$11,550 a month.
The second most expensive city in the world in which to rent is Caracas in Venezuela with high rental prices being attributed to a lack of suitable properties and an increase the number of expatriates seeking somewhere to live in the city. Caracas is followed by New York, Moscow and Tokyo.
The annual survey, which is produced annually by ECA aims to assist global companies to ensure that they provide suitable living and housing allowances to their international expatriate employees, covers more than 130 popular expatriate destinations throughout the world.
Discussing the latest results, which indicate an increase in rental costs throughout the world, Lee Quane, regional director, Asia, ECA International commented: “In many of the locations that are attracting increasing numbers of expatriates, such as Caracas or Mumbai, strong demand and a limited supply of suitable rental properties are pushing up rents for high end property, in some cases quite dramatically.
“In other locations such as Hong Kong, demand has been considerable for some time, due to limited land or a burgeoning middle class, and rental prices have more or less remained at the same high levels as this time last year.”
Many of the most expensive cities in which to rent a three bedroom apartment are in the Asia region with Hong Kong (1st), Tokyo (5th), Singapore (8th), Shanghai (11th) and Seoul (14th) all appearing in the top twenty: “Asian locations dominate the list of the top 20 most expensive locations for rental property. With more and more companies setting up operations in the region the need for the type of housing appropriate for international assignees has increased. Yet with an already limited supply of such properties in many countries here, demand significantly exceeds supply, putting upward pressure on rents,” explained Quane.
The biggest increases in rental costs have been observed in Chinese cities over the last twelve months with the expansion of overseas companies and recruitment of talent from abroad creating increased demand for high-end rental properties. Although the Chinese government have taken a number of measures that are aimed at reducing speculation on the property market, rental prices have continued to spiral. Expatriates living in Beijing, for example, have observed a 12% increase in rental prices over the past twelve months.
Elsewhere, in India, rental prices have also increased by an average of 12% in Bangalore and 7% in Mumbai, with these increases once again being attributed to the growing number of expats who are living in these cities.
According to Quane the most expensive rents in expat destinations throughout the world are often found in expensive expat areas: “Expats often gravitate towards particular areas of cities because of the location of international schools, embassies or social focal points. These tend to be the more expensive, prestigious areas in a city,” said Quane.
“For many companies sending employees on international assignment, financing accommodation can be one of the most significant assignment costs incurred, so companies looking to control costs should consider the issue holistically, taking into account not only the standard of the accommodation they provide, but also its size and location,” he added.