According to the latest research published by ECA International, Hong Kong is still the most expensive location in the world for expat rentals with average monthly costs of USD 10,929. Rental prices increased by 4.9% from last year.
“Rents increased across Hong Kong during 2018 with limited availability, a long-term issue for the Hong Kong housing market, being the main driver. Rent increases are not just limited to central Hong Kong anymore either, with rents expected to rise throughout outlying neighbourhoods in 2019 too, as international firms seek more affordable office space and try to take advantage of cheaper suburbs.” said Alec Smith, Accommodation Services Manager at ECA International.
New York remains the second most expensive city in the world for overseas workers to rent in, and by far the most expensive location in the Americas. However, rental costs have dropped by over USD 250 since last year, as demand dropped slightly.
Smith explained “2018 saw the market delivery of a large number of newly constructed rental properties. This eased issues with low vacancy rates that normally apply in New York, leading to some modest decreases in average rents.”
Rent in London most expensive in Europe for expats
Rent in London is the most expensive in Europe for expats, averaging USD 7,189 (GBP 5,187) per month for a three-bed home according to ECA International (ECA). Despite uncertainty around Brexit, demand for rental accommodation in London remains steady as young professionals are increasingly unable to buy within the M25.
Although rental costs decreased in central London (zone one) this year, rent in outer London remained stable. London maintains its position in the top five most expensive for rental accommodation in the world (4th), followed by Moscow, Zurich, Geneva and Dublin.
ECA’s annual rental accommodation report analyses the rental prices for an unfurnished, mid-market, three-bedroom home in areas commonly inhabited by expatriates. According to this year’s ECA housing report, the average rent in outer London is on the rise at USD 5,543 (GBP 4,000) per month, whereas the average rent in central London has fallen to USD 9,701 (GBP 7,000) for a three-bedroom apartment.
Expatriate rental costs in Europe
Rental costs across Europe rose significantly through 2018, due in part to the strength of the Euro. Whilst Dublin saw the biggest rises in expatriate rental costs in Europe, major cities such as Madrid, Rome, Paris and Barcelona all saw increases over USD 500.
In Spain, Madrid saw the average expatriate rent rise by USD 650 to USD 2828 (EUR 2,299), whilst in Barcelona rent increased by USD 566 to USD 2,521 (EUR 2,049).
Smith said “Madrid and Barcelona have reversed years of falling rents that followed in the wake of the global financial crisis. Their markets are flooded with renters, both from the local young professional population, and international assignees. Property purchase is now out of reach of the majority of city residents, keeping competition for tenancies high.
Meanwhile in Paris, as the city continues to target attracting business due to Brexit, demand remains strong for property in the French capital and expatriate rent has risen to USD 4,090 (EUR 3,324), an increase of over USD 700.
Rental accommodation cost in China drops in global ranking
Chinese cities endured a mixed fortune throughout 2018 with major rent increases seen in some locations, but static or decreasing levels of rent in others. Shanghai was the highest placed Chinese city and the eighth most expensive city for expats to rent in globally, averaging USD 5,305 a month.
Smith said: “With a new property tax mooted to be introduced in Shanghai from 2020, many landlords are now choosing to sell their properties rather than continuing to rent them out. This has led to a reduction in the availability of rented accommodation, prompting some rent increases.”