- Rental prices fall in Singapore despite strong demand from locals
- Shanghai falls in the regional rankings
- Tokyo has largest rent increases in Asia over the past 12 months
Hong Kong remains the most expensive location in Asia for high-end rental accommodation. This was one of the findings of the latest Accommodation Survey published by ECA International, the world's leading provider of knowledge, information and software for the management and assignment of employees around the world.
ECA International has been conducting research into accommodation for more than 20 years to help companies provide the right housing options as part of the overall compensation package for mobile employees. The survey compares rental accommodation commonly leased by expatriate staff in over 230 locations worldwide.
Over the past five years, Hong Kong has continued to top our regional rankings. With a high population density and a consistently limited supply of property, average rents in the territory have long been more expensive than in other high-profile cities
Rents for an unfurnished, high-end three-bedroom apartment across popular expatriate neighbourhoods in Hong Kong average US$10,189 per month.
“Despite high rental prices in Hong Kong, average rental costs here have fallen by around 13 per cent since 2012. Over this period, the residential rental market has been facing downward pressure as many homeowners are leasing out their properties rather than selling them. On the demand side, factors such as companies reducing the levels of assistance provided to assignees and the conversion of assignees to permanent terms, where company assistance in meeting housing costs is reduced or removed, has also meant that landlords with properties in the areas popular with expatriates are having to reconsider the rents they demand,” said Quane.
To assist companies in formulating their accommodation policy and deciding what level of housing allowance to provide to international employees, ECA International publishes annual Accommodation Reports. These reports contain information on the types of accommodation and geographical areas usually favoured by international assignees – typically areas near to international schools, embassies or social focal points. Data from these reports is also used in ECA's Accommodation Tool for setting, managing and reviewing accommodation allowances for mobile staff.
In US dollar terms, rents in the city are more than 14 per cent higher than in Asia's next-most expensive location, Tokyo. Five years ago, rents in Hong Kong were around 20 per cent higher than in the Japanese capital but the gap has decreased significantly since then. Tokyo is followed by Seoul, Yokohama, Shanghai and Beijing in the regional rankings.
Singapore comes in at seventh position in the regional rankings this year, falling from fourth last year.
“Expatriate numbers in Singapore have stabilised recently, which has curbed demand for rental property in popular expatriate neighbourhoods. This, combined with an increased supply of property in the market, has caused landlords to respond by reducing rental prices. Since 2012, average rents in Singapore have therefore significantly decreased,” said Quane.
Mainland China and Macau
Shanghai, which was ranked as having the third most expensive high-end rental accommodation in Asia a year ago, has moved down two places to fifth. This is due to the large rental price rises in Seoul (3rd) and Yokohama (4th). Within China, Shanghai is just ahead of Beijing (6th regionally), Dalian (19th) and Guangzhou (20th).
The average rent of ranked locations in China has generally risen over the past year.
“Our recent review of average rent levels in China suggests that the introduction of VAT is a contributing factor to some landlords raising asking rents this year. Shanghai, Beijing, Shenzhen and Guangzhou all reported notable increases in average rents in the past year. Without the VAT changes, we would have expected many locations to post minimal changes in average rents in 2016 as expatriate demand has faltered amid economic uncertainty,” said Quane.
Macau has remained relatively stationary in the regional rankings in the last year, falling one place into 12th position this year.
Tokyo has largest rent increases in Asia over the past 12 months
Across the region, the average rental price for a three-bedroom property averages US$3,124 – just one per cent higher than observed last year.
The largest rent increases in Asia over 12 months were observed in Tokyo, although this still wasn’t enough to overtake Hong Kong. The cost of renting a three-bedroom apartment increased, driven by Japan’s continued strong economic performance and increasing demand from expatriates. This has put pressure on the supply of suitable housing, pushing up prices.
A similar trend was also observed in Indian cities, with average rental costs increasing in Mumbai (8th regionally), New Delhi (16th) and Kolkata (21st). India’s standing in the global marketplace continues to strengthen, where demand for high-quality accommodation in major cities and a persistent lack of supply have kept rents high.
Notes to Editors
* Please note that when ‘five years’ is referenced in the text this is referring to the period between ECA’s September 2011 and September 2016 surveys.
Figures used in this release were taken from ECA's September 2016 Accommodation Survey.
ECA International's housing data
This ranking is based on data from ECA's Accommodation reports. ECA began publishing Accommodation Reports 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.
The rental prices were collected in September 2016 and have been converted into US dollars for ease of comparison using the September 2016 exchange rate.
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