Expats in Hong Kong and Singapore are able to breathe a small sigh of relief as rents at the top end of the market finally seem to be dropping, if only a small amount.
According to a recent report by Bloomberg as banks reduce their staff counts in the 2 cities and cut back on expenses this is causing rental prices to drop with prices now 13% off their peak in October 2011.
Rents for condominiums charging more than S$12,000 (USD$9700) are at their lowest since December 2009 according to London-based broker Savills whilst it’s thought that rents in Hong Kong for properties charging more than HK$50,000 (USD$6448) could drop 10% this year according to Crown Relocations.
Since the start of the financial crisis in 2008 housing allowances for expatriates in Hong Kong have dropped nearly 50% as expat packages have become less generous and companies have tried to cut costs. Whilst at very senior levels generous expat packages are still available these are fast becoming a thing of the past. There has also been a move by companies to convert expatriate workers onto local packages meaning that they can reduce the benefits on offer and this has led some expatriates to look towards cheaper accommodation.
On the other hand with an increasing number of expatriates moving to Thailand a shortage of suitable properties available for rent in Bangkok is causing rents to rise significantly for the first time in 20 years according to CBRE Thailand.
Two and three bedroom units are the highest in demand with occupancy rates over 90% in popular areas. According to James Pitchon, executive director of CBRE Thailand, there has been very little increase in rents since the early 1990’s but this is starting to change.
In the second quarter of 2013 there were around 65,000 expatriates with work permits in Bangkok an increase of 10% year-on-year according to the Alien Occupational Control Division of the Department of Employment. This number doesn’t count diplomats or those living in Bangkok but working outside the city.