Hong Kong remains most expensive location in the world for expat accommodation, despite drop in rents
Hong Kong retains position as most expensive accommodation for overseas workers, despite a drop of over 5% in rental costs from last year.
Hong Kong has been named the most expensive location in the world for expat accommodation for a fourth year in a row, but still saw rental costs drop considerably due to the effects of Covid-19. 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.
The average monthly rental price for an unfurnished, mid-market, three-bedroom apartment in areas commonly inhabited by international executives in Hong Kong was USD 10 769, a drop of 5.95% compared to 2020.
“Hong Kong has seen a rare decrease in rental costs this year, as Covid-19 has lessened the demand for accommodation in the top-tier areas where expatriates would normally reside” said Lee Quane, Regional Director – Asia at ECA International. “The pandemic has had a serious effect on international business in general, but more specifically has severely limited the number of overseas workers moving to Hong Kong. This, together with the ongoing impact of socio-political tensions on Hong Kong’s economy and an unemployment level at its highest rate in over 15 years, has resulted in a lower demand for high-end accommodation and therefore a drop in the average expatriate rent. However, Hong Kong is still by far the most expensive location in Asia for rental costs and still more expensive than New York, despite the gap closing slightly this year.”
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 360 locations worldwide.
Cities in Taiwan all rose in the rankings this year, as rental markets saw an increase – especially Taipei which climbed 20 places to 29th most expensive location worldwide.
Quane said “Taiwan was one of the few locations in the APAC region to see significant rises in accommodation costs this year, with the average monthly rental cost in Taipei now standing at USD 4 101 – a rise of over 5% from last year. This growth was a knock-on effect of the nation’s success in mitigating the transmission of the Covid-19 virus, as well as repatriations of staff previously assigned to China and demand for talent in key industries in Taiwan which all resulted in increased demand, meaning that rents were able to stay consistent and even increase in many high-end areas.”
Meanwhile, Singapore fell one spot in the rankings to 26th position globally, as rents fell by an average of over 2%. The average monthly rent in Singapore is now USD 4 210 (SGD 5 747).
“Rent levels in Singapore are always notably stable and this year is no different, with only a slight dip in the rankings. However, this is a reversal of the increase in rental costs seen in 2019 and is likely the result of greater immigration restrictions for workers and other travellers to the city, thereby suppressing demand for all types of accommodation” explained Quane.
Locations reliant on international tourism have seen their rental markets hit especially hard during the pandemic, resulting in some major drops in the rankings. Bangkok has fallen 19 places to 49th, while Hanoi saw a similar drop of 12 places to 81st.
Quane said “Rental prices have dropped in many locations across Asia over the past year, but this has been especially notable in locations which are heavily reliant on overseas visitors and residents, such as Thailand and Vietnam. Average rents in Bangkok have dropped by over 12% in just one year, while Hanoi and Ho Chi Minh City have seen a negative swing of 9% and 6% respectively. The rental market in these locations is heavily tied to the fortunes of the tourism industry and landlords who previously rented accommodation on a short-term basis have converted these to long-term leases, increasing supply and reducing market rents further. Therefore, it is unlikely that we will see a change to this trend until international travel is fully open again.”