Hong Kong is most expensive place for expats to rent property
Hong Kong is the most expensive location in the world to rent a high end three bedroom apartment, followed by Caracas in Venezuela, according to research.
Despite a 2 to 3% correction since this time last year, rents for an unfurnished three bedroom apartment in a sought-after area of the city remain high, averaging US$11,550 per month, the latest accommodation data from HR professionals solutions provider shows.
In Caracas a lack of suitable properties and high demand driven by a booming petroleum industry led to rents continuing to rise dramatically. New York, Moscow and Tokyo complete the list of the top five most expensive locations in the world to rent a three bedroom apartment.
Globally, rental prices for a three bedroom apartment have fallen slightly from last year's US$3,080 per month average to US$3,030. With many of the world's major financial markets uneasy, particularly regarding the Eurozone, many rental markets have stagnated somewhat, the report reveals.
‘In many of the locations that are attracting increasing numbers of expats, 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,’ said Lee Quane, regional director for Asia at ECA International.
‘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,’ he added.
Within Asia, the most expensive high end rental property after Hong Kong is found in Tokyo, which is fifth globally, followed by Singapore in eighth place, Shanghai in eleventh and Seoul in fourteenth. Karachi in Pakistan has the region’s lowest rents.
The average cost for Asia for three bedroom rental accommodation is US$3640 per month, some 20% higher than the global average.
‘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 rental price increases in the region have been in mainland China, where demand for high end accommodation is growing as companies expand their operations in the country. While a series of measures have been introduced by the Chinese government to try and curb speculation on the sales market, rents continue to increase across the country. The increase has been most pronounced in Beijing, ranked nineteenth globally, up from 26th last year, following a year on year increase of over 12%.
Rents in India have also increased significantly as more companies establish themselves there. Bangalore provides another example of a location that has seen an average increase of more than 12% since the same time last year. In Mumbai, rents have gone up 7% on average over the year as demand from the growing number of expatriates for high end property continues to exceed supply, putting upward pressure on prices.
In Australia a three bedroom apartment costs US$3,530 per month on average, slightly up on last year's figure. Sydney is the most expensive Australian location for rental property, is in 12th place globally, followed by Perth in 25th and Melbourne in 33rd. The largest increases in Australia between surveys were recorded in Perth, where demand for rental property remains particularly strong as the mining boom continues. Rents there have increased almost 9% in local currency and just over 7% in US dollars. Rents in both Melbourne and Adelaide have fallen.
Europe's most expensive location for high end rental property is again Moscow. Globally, it ranks fourth and an increasing expat population coupled with continuing tight supply has led to price increases in the city for the past three years. The Russian capital is followed by London in sixth place and Geneva in 13th. The largest increases in rental prices in Europe were observed in Vilnius, Ljubljana and Oslo. Rents fell most in Athens.
Within the region, rental prices for three bedroom apartments average US$2,660, down from the previous year's average of US$2,860.
The Venezuelan capital, Caracas, has overtaken New York to become the most expensive place for three bedroom rental accommodation in the Americas. Rents there increased by over 30% in 2012. The price of rental accommodation also rose sharply in Rio do Janeiro and Santiago.
In the Middle East and Africa Abu Dhabi has the most expensive property despite falling rents and the supply of rental properties significantly outstripping demand. Globally it ranks 23rd, followed by Dubai in 35th. Unlike Abu Dhabi, rents in Dubai have increased this year as the market there shows signs of recovery following falls in the previous three years.
In Africa, rents in Nairobi have continued to rise sharply as an influx of foreign companies and expats has triggered exceptional price increases.