With an increasing number of international assignees, Hong Kong remains the most expensive city to rent high-end residential property, followed by Tokyo, Moscow, New York and London. Rents for an unfurnished three-bedroom apartment in Hong Kong average US$11,813 per month. This is a 15% increase on last year, one of the highest increases in the region.
The research, conducted by recruitment consultant ECA International, shows that over 90% of companies that send employees on international assignment contribute to the cost of accommodation in the host country. For companies, this can be one of the most significant assignment costs incurred.
Expatriates tend to gravitate towards particular areas within cities because of the location of international schools, embassies or social focal points. These often tend to be the more expensive, prestigious areas in a city.
“International assignee numbers in Hong Kong have increased again over the past two years, contributing to the demand for rental accommodation,” says Lee Quane, Regional Director, ECA International Asia. “This comes at a time when a significant proportion of the local population, unable to buy property due to steep increases in property prices, is looking to rent instead. This has put renewed pressure on the already limited supply of rental property here, resulting in these large rent increases.”
With many Asian economies performing well during 2011, expatriate populations have increased in major cities throughout the region. As a result, rental prices for three-bedroom apartments in Asia have gone up 5% in local currency terms over the last 12 months. Mainland Chinese locations are among those that have seen the largest increases in the region. However, rental increases elsewhere in the world mean that Shanghai remains in 18th position globally and Beijing has actually slipped two places to 26th.
“There are a number of reasons behind rising rents in mainland China,” adds Quane. “Continuing increases in international assignments into China are creating an on-going demand for rental property. Furthermore, with house prices continuing to fall there, many would-be buyers are looking to rent until the housing market bottoms out. These factors, along with municipal measures and tougher lending criteria, have driven an increase in demand for rental accommodation.”
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