- Hong Kong is the most expensive location in Asia
- Tokyo remains second in the rankings, whilst Kuala Lumpur continues to fall
China sees significant increases in rental costs in 2017
Hong Kong is once again the most expensive location in Asia for rental accommodation.
This was one of the findings of the latest research 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 costs for international executives for more than 20 years to help companies provide the right housing options as part of the overall compensation package for mobile employees. The research compares rental costs in accommodation in areas typically inhabited by expatriate staff in over 240 locations worldwide.
Rental prices for an unfurnished, mid-market, three-bedroom apartment in areas commonly inhabited by international executives in Hong Kong average USD 10 461 per month. This is over USD 2 000 per month more than the next most expensive Asian location, Tokyo.
“With a high population density and a consistently limited supply of property, the average rent in Hong Kong continues to remain more expensive than in other high-profile Asian cities,” said Lee Quane, Regional Director – Asia, ECA International. “Rents have risen slightly in the past 12 months. However, despite the high rental costs in Hong Kong, rents for the type of accommodation featured in our research remain lower than they were in 2012.”
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 executives – typically areas near to international schools, business districts 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.
Accommodation costs in many locations in China have increased in the past 12 months. Shanghai is the most expensive location in mainland China, and the third most expensive location in the Asia region.
“Rents in Shanghai have risen owing to an increase in the number of inbound relocations to the city. This elevated demand in an already tight market has caused the rent rises we have seen in 2018,” said Quane.
“However, the fastest rates of increase have been witnessed in the Pearl River Delta where rents have risen in double-digit terms in both Guangzhou and Shenzhen due to high relocation rates to these cities. Supply is yet to match demand for residential accommodation, particularly in western Shenzhen, which has caused rents to increase at fast rates for the past seven years,” added Quane.
Rents in Tokyo have also continued to go up, rising by 4% on average.
Elsewhere in Asia, Singapore has continued to slip down the rankings as accommodation prices continue to drop.
Quane said, “Singapore is now the eighth most expensive location in Asia for rental accommodation, down one place from last year, and down from fourth in 2016. This is due to a slowing of economic growth and a net reduction in inbound assignments, exacerbating the surplus of higher-end properties on the market that would normally attract expatriates. This oversupply has reduced average rent levels in Singapore for the past three years.”
In general, the costs of rental accommodation in Asian cities have risen in the past 12 months, with declines evident only in a handful of locations, such as Ho Chi Minh city, Jakarta and Yangon.
Likewise, Kuala Lumpur’s fall down the rankings shows no signs of stopping. The Malaysian capital is now out of the Asian top 40 most expensive rental locations and more affordable than places such as Colombo, Sri Lanka, and Kathmandu, Nepal.
“The property market in Kuala Lumpur has suffered from high levels of speculation over the past couple of years and high levels of new construction. The market is oversupplied, and landlords are having to compete significantly on price to secure tenants,” Quane said.
“The domestic economy has not been strong enough to bolster demand for the excess of higher-end properties on the market. However, a slowdown in property construction and cooling measures from the Malaysian central bank should see the market stabilise in future years,” he added.