New York, 6 March 2014 – New York is the world’s fourth most expensive location to rent a high-end three bedroom apartment and is the 2nd most expensive in the Americas after Caracas, according to ECA International, the world's leading provider of knowledge, information and technology for the management and assignment of employees around the world.
Rents for an unfurnished three-bedroom apartment in a sought-after area of the city average US$ 9,200 per month.
Hong Kong remains the most expensive location in the world to rent a high-end three bedroom apartment, despite rents there falling for the second consecutive year. Rents for an unfurnished three-bedroom apartment in a sought-after area of Hong Kong average US$11,440 per month – 1 per cent less than last year and 3.5 per cent less than the previous year. With a high population density and a consistently limited supply of property, average rents in the territory have long been significantly more expensive than other high-profile cities.
A high-end three bedroom apartment costs almost US$2,200 more per month to rent in Hong Kong than an equivalent property in Moscow, the next most expensive city in the global rankings – despite rental prices in the Russian capital rising approximately 4 per cent between surveys.
Caracas in Venezuela is third in the ranking. In local currency, rental prices there have increased by a dramatic 50 per cent since last year due to the country's rampant inflation and construction failing to keep pace with demand. However, the much-weakened Bolivar means that the increase is considerably less significant when converted into US dollars.
London comes in at fifth position just below New York. [See top 20 table below].
Globally, rental prices for a three-bedroom apartment average around US$3,000/month.
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 for more than 180 locations. 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.
"Housing provision for expatriate staff is an expensive, important and often emotive element of the overall remuneration package," said Lauren Smith, General Manager, ECA International New York. "A fair and competitive yet cost-effective approach can best be achieved by being consistent across locations. This can be facilitated by establishing budget tables based on family size and, in some cases, seniority, all of which should be factored into a well-considered housing policy. Companies also need to manage the expectations of their global staff: someone from the United States, for example, may well be used to a more spacious property than they are likely to find if they are assigned to Hong Kong."
Caracas has the most expensive rental property in the Americas and ranks 3rd globally. Rents have gone up almost 50 per cent there in local currency over the year as new construction projects have not kept up with demand. However, the weak bolivar means that this increase falls to just 1 per cent in US dollar terms.
"Depending on how companies provide housing or allowances to their expatriates, major currency movements can have a big impact on costs," explained Smith. "Companies need to consider this carefully when designing their expatriate housing policy and packages."
In the Americas, Caracas is followed by New York (ranked 4th globally), Bogota (8th), Rio de Janeiro (11th) and San Francisco (15).
In the Brazilian city of Sao Paolo (ranked 19th globally) increases were also significant: the price of high-end rental accommodation went up almost 30 per cent as demand grew in contrast to last year’s 9 per cent rise. Even when converted into US dollars the increase is still a significant 11 per cent. Rental prices in Rio do Janeiro (11th) have increased 14 percent, down from last year’s 22 per cent increments.
Rents for a high-end three-bed apartment average US$ 2,900 in North America while in Latin America they are typically around US$ 4,450.
Within Asia, Hong Kong is followed by Tokyo (6th globally). Rents there increased by approximately 6 per cent over the year, largely as a result of confidence returning to residential markets after it had fallen following the earthquake in 2011. However, a weaker yen has meant that the cost of renting a three-bed high end apartment actually fell by about 15 per cent when converted into US dollars.
Tokyo is followed by Singapore, ranked 7th globally, Shanghai (9th) and Seoul (13th). Karachi has the lowest rents for three-bedroom apartments, not only in the region but globally.
China has presented a mixed picture. Increases in rents were fairly muted over the year in Shanghai (9th globally) and Beijing (17th) as the Chinese economy slowed and neither city saw rises greater than 3 per cent. This contrasts with last year, when rental prices there went up by 8 per cent and 12 per cent respectively. Demand has nevertheless remained strong in the cities of Shenzhen (110th globally) and Suzhou (122nd), where rents have risen 9 per cent on average in the 12 months between surveys.
In Singapore, ongoing demand for high-end properties saw rental prices rise by around 4 per cent over the year in local currency terms. However, rents in Singapore still average around half the cost of an equivalent property in Hong Kong. Singapore ranks 7th globally.
Moscow is Europe's most expensive city for rental property and has the second highest rents globally after Hong Kong. Supply there has been tight in recent years, putting upward pressure on prices. Within Europe, the Russian capital is followed by London (5th globally) and Zurich (12th).The Spanish cities of Barcelona (96th globally) and Madrid (78th) saw some of the biggest falls in rental costs in the region and globally. Both fell nine places in the global ranking due to lower or stagnant demand. In central Bucharest, ranked 87th globally, the construction of higher quality properties in 2013 than previously available led to marked increases in average rents and the city saw some of the largest increases in Europe.
Among the Australian locations surveyed, Sydney is the most expensive for rental accommodation. Rents for a three-bed apartment there have gone up around 3 per cent in the 12 months between surveys. However, globally, Sydney has slipped from 12th to 20th place. The weaker Australian dollar means that falls of 10 per cent were observed when rents in Sydney were converted into US dollars for comparison. In Perth, which experienced Australia's highest rent rises a year ago, a partial downturn in the mining sector and increasing cost consciousness on the part of many employers led to decreases in rental prices during 2013. The city has dropped from 25th to 48th place in the global ranking.
Middle East and Africa
Dubai (16th) replaces Abu Dhabi (24th) as the most expensive location for rental property in the Middle East. The cost of renting a three bed property there increased more than 30 per cent as demand across Dubai continued to accelerate this year.
Of the African locations surveyed, Lagos has the most expensive rental properties on average - despite rent falls of approximately 6 per cent due to a better supply of residential properties on the market. It ranks 10th globally. Gaborone (123rd), Dakar (105th) and Kampala (85th) also saw falling rents, while Nairobi saw the largest increases of 23 per cent due to demand outstripping supply. The city now sits in 80th place globally.
Top 20 global most expensive locations for high-end three-bed rental apartments
Top 20 global most expensive locations for high-end three-bed rental apartments
Rio de Janeiro
Notes to editors
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. The principal sources are ECA's survey data, specially-collected surveys and information from letting agents and relocation agents. 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 2013 and have been converted into US dollars for ease of comparison using the September 2013 exchange rate.
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About ECA International (www.eca-international.com)
Recognised since 1971 as a world authority in its field, ECA is a leader in the provision of knowledge, information and technology to inform, guide and support managers handling compensation and benefits for international workers moving around the world. ECA offers organisations of all sizes an unrivalled portfolio of data, calculation aids, salary management software, reports, guides, surveys and consultancy to help them structure and manage their international rewards programmes for long-term, short-term and permanent moves.
For further information, please contact:
Lauren Smith (New York)
ECA International LLC
Tel: +1 212 582 2333
Josephine Woolley (London)
Tel: + 44 (0) 207 351 5000
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