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Expats find rental accommodation in USA among most expensive in the world

  • Six US cities now feature in the top 20 global rankings for rental accommodation, with three now in the top 10
  • San Francisco has seen rental prices rise by USD $218 per month, re-entering the top five most expensive locations in the world
  • Biotech and pharmaceutical industries continue to draw expatriates to Boston causing rent to increase by $412 per month
  • New York sees first rent increase since 2016, now costing on average $10,237 per month

The strength of the US dollar (USD) combined with local rent hikes has caused USA cities to become some of the most expensive in the world for expats to rent in. New York (2nd), San Francisco (5th),  and Miami (8th) are among the top 10 most expensive according to the latest Accommodation Ranking report published by global mobility expert, ECA International (ECA). 

Following a monthly rent increase of $218 on average, San Francisco has entered the top five most expensive places in the world for the first time, now costing $6,590 per month. Meanwhile, as South Florida’s economy continues to strengthen, the average rent in Miami for an unfurnished, mid-range, three-bedroom home costs $5,254 per month, up by $136 since last year.

The biotech and pharmaceutical industries continue to draw expatriates to Boston in large numbers, which has caused rent in Boston to increase by a whopping $412 on average ($4,487 total per month) making it the 20th most expensive in the world, having previously ranked 30th.

“Generally speaking, the US cities in our rankings have risen due to the strong performance of the dollar as the strength of the US economy endures, but there are also local reasons for the rises to expatriate rental costs too. For example, in Boston, biotech and pharmaceutical industry sectors have drawn expatriates to the city in large numbers, bolstering demand for properties in prime neighbourhoods,” said Michael Witkowski, Vice President - Americas at ECA International.

“The influx of large tech companies in San Francisco has driven increased demand in the area. Likewise, in Miami, there is a lack of availability of entry-level accommodation in prime districts which has caused rent costs to increase in-line with high demand, however this is expected to have a sharp turnaround following a period of vast construction for residential properties in the region,” added Witkowski.

New York has seen the first rent increase since 2016, with rental accommodation averaging $10,237, up by $136 per month. 

Witkowski said “New York saw lower than expected rental increases after Amazon withdrew their plans to establish a second headquarters in Queens.”

Rental highs across Europe

London continues to hold the top spot for the most expensive rental accommodation in Europe for expatriates, with an increase of £121 per month. The average cost of a three-bedroom, mid-range home for expatriates is now £5,308 per month (USD 6,959).

“London remains attractive to workers in the UK and from abroad, despite anticipated economic disruption from Brexit. In addition to this, the phasing out of tax relief on mortgage interest payments for buy to let landlords has acted as a brake on supply. Removing this tax relief has had the intended effect, a reduction in the number of new buy-to-let landlords, but a knock on effect has been a reduction in the availability of rented accommodation,” said Witkowski.

Meanwhile, a growing population and an increase in Airbnb rental properties has caused rental accommodation prices to continue to rise in Edinburgh. The average cost of a three-bedroom, mid-range home in the Scottish capital has risen by £106 per month, up to £1,635 (USD 2,144), the highest in over five years.

Dublin remains in the top five most expensive locations in Europe for rental accommodation, with the average rent now €3,613 per month (USD 4,086), making it costlier than other European capital cities such as Paris at €3,461 (USD 3,914), Berlin at €2,354 (USD 2,662) and Madrid at €2,393 (USD 2,706). 

Many German cities also saw big jumps in the average rent, with Munich, Berlin and Stuttgart all seeing increases of over 6% from last year.

“There has been a property boom for the last 10 years in Germany, as its high quality of life, policy benefits for expats, and sustained growth in employment rates and GDP makes it an attractive area to live and set up business. Home ownership is also very low, with the percentage of renters in Berlin being as high as 85%; construction capacity has been lagging behind this high demand and there is a critical housing shortage,” said Witkowski.

Hong Kong remains the most expensive location in the world for expat rent

Hong Kong has been named the most expensive location in the world for expat accommodation, for the third year in a row, with the average monthly rent standing at a whopping USD 11,318, an increase of over 3%. 

Witkowski said: “Despite another increase in rental costs for expatriates living in Hong Kong, the rise was lower than the 4.9% rise seen the year before. Hong Kong has the most expensive rents due to a number of factors, such as the high population density of the territory and limited opportunities to build new homes, which combine to drive rental costs upwards. However, in light of the prolonged anti-government protests and coronavirus outbreak currently underway, we expect to see rents fall throughout 2020 as the number of overseas workers in Hong Kong drops significantly and the usually high demand for housing is tempered.”

Top 10 most expensive cities to rent in the world
Location
2020 Ranking
2019 Ranking
Hong Kong
1
1
New York NY
2
2
Tokyo
3
3
London
4
4
San Francisco CA
5
6
Port Moresby
6
5
Shanghai
7
8
Miami FL
8
11
Buenos Aires
9
10
Yokohama
10
14
 
 
-ENDS-

Notes to Editors

  • The survey was based on the average rental prices for a three-bedroom home in the mid-range of the expatriate market.
  • The rental prices were collected in September 2019 and have been converted into US dollars for ease of comparison using the September 2019 exchange rate.

About ECA International

ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.

Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.

We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.

ECA International: Mobility solutions for a world that’s constantly moving.

ECA International's housing data

This ranking is based on data from ECA's accommodation reports, which we began publishing annually in 1996. The reports provide comprehensive and reliable information for locations worldwide on the rental trends, types of accommodation and districts commonly sought by expatriates. To ensure impartiality and to maintain the accuracy of information, data from a number of sources is used to compile each accommodation report. ECA uses a global network of estate agents, relocation agents and extensive in-house research into worldwide property markets to establish and verify the housing data in the reports. Rental prices are collected annually. This housing data is also fed into ECA's Accommodation Tool which can be used to set, manage and review the right accommodation allowances for international assignees.

For further information, please contact:

Jack Firth 
Tel: +44 0 20 7351 5000
Email: Jack.Firth@eca-international.com

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