Asian cities dominate rental property prices abroad
Rental property prices in Asian cities are amongst the highest in the world for expats according to the latest global survey by Mercer for 2009.
As the world tries to shake off economic slowdown there have been considerable changes in rental property markets. Asian cities once again make the top ten of the world’s top most expensive places for expat rental property along with New York, Moscow—the most expensive city for expat rental properties, Geneva and London.
Some 300 cities worldwide were surveyed by Mercer, to create a rental property index of fifty of the most popular locations where multinational companies send their employees on overseas assignments.
According to Mercer’s Marie-Laurence Sépède, "the comparative cost of expat housing has been significantly affected by strong currency fluctuations over the past few months as well as the sliding of housing markets since 2008."
Whilst the euro has dropped 12 percent against the US dollar, other currencies have also dramatically lost out, such as the Polish zloty, Mexican peso, Australian dollar, Brazilian real and the British pound, which have all dropped more than 30 percent since September last year.
Mercer’s rental property index bases its data on typical rents for one- to four-bedroom apartments and three- to four-bedroom houses, furnished and unfurnished, in different international cities. New York was used as a benchmark with a score of 100 points. However, cost comparisons made using the US dollar means that currency exchange rates have had some influence on the rankings.
Asia Pacific: Prices amongst highest worldwide
Tokyo leads as the second most expensive rental city in the world for expats (score of 156.10) followed by Hong Kong (142.10) which has dropped to third place due to a reduction in demand. Singapore (94.10) is now tenth, whilst Beijing (98.30) has climbed to 6th place with rental prices fairly stable as its currency is linked to the US dollar. In India, expat property continues to be in demand with Mumbai (105.10 now 4th place competing with New York, and New Delhi (96.60) now ranked 8th.
Other key international cities in the region have experienced significant changes in their rankings. With the devaluation of the Korean Won by 30 percent, Seoul’s ranking has dropped five places to 16th (73.30). Jakarta (49.50) has leapt to 35, up seven places and Ho Chi Minh City (55.10) is up eleven places to 23rd position.
Further south in Australia, Sydney (49.70) remains the most expensive rental city in the country, but due to Australian currency losing 30 percent against the US dollar, the city has dropped seven places coming 32nd in the world.
Europe: Rental prices dropping slightly
For expats Moscow remains the world’s most expensive rental city (168.30), but in general rental prices for expats in European cities appear to be getting cheaper compared to Asia. With the fall of the British pound against the dollar and increase in available rental property, London (95.60) dropped five places to 9th position, but remains the third most expensive in Europe after Geneva (96.80).
Other notable European cities ranked within the top twenty include Paris (13th), Kiev (14th), Milan (15th) and Copenhagen (20th). Warsaw dropped 13 places to a ranking of 31st due a fall in its currency valuation against the dollar.
North America: Rents rise before the fall
The rental market within the United States appears strong with rental prices going up across the nation. However, Marie-Laurence Sépède of Mercer is not confident that this will continue. She predicts that whilst more people are being forced to look for apartments and houses to rent due the number of foreclosures.
“we expect rental prices to decrease as unemployment and other economic factors begin to influence the market.”
New York is ranked 5th in the world (100), going up two places, whilst Los Angeles is 17th (72.60).
South America: Value of Brazilian currency falls by almost 50 pc
In Brazil the currency has been hard hit with a nearly 50 percent drop in value against the US dollar. Sao Paulo’s global ranking for its rental property prices have fallen from 16th to 27th place (53.40) and Rio de Janeiro from 20th to 35th place (49.40).
Other major cities in South America have seen renting becoming more expensive for expats. In Venezuela Caracas (68.00) is ranked 18th with Bogota (58.00) in Colombia now 22nd. Argentina’s Buenos Aires (42.00) ranking has risen from 47 to 42nd place. Meanwhile Mexico City has dropped eleven places to 49th position (37.50).
Middle East: Rental prices in UE expected to fall
The United Emirates has not yet seen a fall in rental prices, though this is expected to happen in coming months as the economic slowdown has its impact on the region. Dubai has had the most expensive rental rates in the Middle East and its ranking now sits closely to the top ten at 12th place (82.50). Meanwhile, in Saudi Arabia Jeddah is ranked at 47th (37.80).
As countries have coped with difficulties due the economic slowdown there has been much movement of city rankings in terms of rental properties which according to Sépède at Mercer can largely be attributed to currency fluctuations.
Sépède predicts “a general decline in rental prices due to the economic slowdown. Multinational companies should closely monitor these changes in the markets so as not to lose out on opportunities for cost savings.”
Ten top 50 ranked cities, February 2009
|3||Hong Kong||Hong Kong|| |
|5||New York City||United States|| |
|8||New Delhi||India|| |
|9||London||Great Britain|| |
Mercer/ Peter Orange/ Expatica