- London is the fourth most expensive in the world despite Brexit
- Moscow sits in second position in the regional rankings – with rents falling over past five years
- Irish cities rise in regional rankings – Dublin sees highest rent increases in Europe
- New York overtakes Hong Kong to become most expensive location globally
London remains the most expensive location in Europe for high-end rental accommodation, despite the fall in the value of the pound. This was one of the findings of the latest Accommodation Survey 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 for more than 20 years to help companies provide the right housing options as part of the overall compensation package for mobile employees. The survey compares rental accommodation commonly leased by expatriate staff in over 230 locations worldwide.
Rents for an unfurnished three-bedroom apartment across popular expatriate areas in London average US$7,886 (£5,574) per month. In US dollar terms, rents in the city are significantly higher, approximately 40%, than in Europe's next-most expensive location, Zurich.
London has continued to top our regional rankings. With a high population density and a consistently limited supply of property, average rents in the city have long been more expensive than in other high-profile cities in Europe
On a global scale, London continues to sit in fourth position in the world this year. While Brexit may not have applied significant downward pressure last year on rental prices in London, there could be some interesting developments in the year ahead.
“Uncertainty over the projected impact of Brexit on the financial sector, combined with a recent unprecedented surge in supply in prime Central London neighbourhoods, could lead to a polarisation in rent movements between Central London and Greater London - where supply levels remain tight. As Brexit negotiations continue, the predicted loss of a number of banking jobs from London is likely to put downward pressure on rents in prime neighbourhoods in the near future.” said Smith.
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 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.
Irish cities rise in regional rankings – Dublin sees highest rent increases in Europe
Across Europe, the rental price for a high-end three-bedroom property averages US$2,330 this year.
Moscow continues to sit in second place in the European rankings. However, in 2012, Moscow was the most expensive location in the region for high-end rental accommodation. Since then, rental prices have fallen meaning that London is now the most expensive. This is mainly due to the decline of the Russian ruble against the US dollar over this period.
Cities across Switzerland, France and Germany have remained relatively stationary in the European rankings. Zurich and Geneva are both unmoved in the past year, holding third and fourth positions respectively in the regional rankings. Paris continues to sit in sixth position in the regional rankings and has done so for the past five years. Munich has not moved this year, staying in 25th place, although it has risen by three places since 2012.
The largest rent increases in Europe were observed in Ireland. This led to Dublin rising to 11th and Cork rising to 54th in the regional rankings in the past year. Despite consistent new supply on the market, Dublin’s rental market cannot meet the demand from city residents, immigrants arriving into Ireland and expatriates. Even as prices continue to rise here, available properties are typically let soon after being put on the market.
The opposite trend was observed in ranked Norwegian cities, with average rental costs falling in both Oslo (16th regionally), and more substantially, Stavanger, which fell 11 places to 23rd in Europe - the largest fall in the European rankings this survey.
Rest of world – a global perspective
New York overtakes Hong Kong to become most expensive location
New York is now the most expensive city in the world for high-end rental accommodation, overtaking Hong Kong in the global rankings. In the past year, average rental costs here have risen by around 4% to US$10,502 per month.
“New York continues to top the regional rankings and has moved up from second last year to top this year’s global rankings. The rental market continues to be very active and rental prices have been climbing since the lows of 2009. This has been fuelled by a strong employment market and an influx of business in key service sectors,” said Michael Witkowski, Vice President - Americas, ECA International. “Rents are expected to remain high and continue to dwarf income growth in the coming year. Although a surge in the supply of rental accommodation in popular expatriate neighbourhoods in Manhattan, combined with renters being unwilling, or unable, to pay ever higher sums, could see the rental prices peak,” said Witkowski.
Hong Kong remains the most expensive location in Asia for high-end rental accommodation, falling to second place behind New York on the global scale. Rents for an unfurnished three-bedroom apartment across popular expatriate neighbourhoods in Hong Kong average US$10,189 per month. Five years ago, rents in Hong Kong were around 20% higher than in the Japanese capital, Tokyo, but the gap has decreased significantly since then. In the past year, Tokyo has risen by four places in the global rankings to third place.
Shanghai, which was ranked as having the 12th most expensive high-end rental accommodation in the world a year ago, has moved down two places to 14th. Average rents of ranked locations in China have generally risen over the past year. Seoul, in Korea Republic, has risen by nine places in the global rankings in the past year to 11th.
Notes to Editors
* Please note that when ‘five years’ is referenced in the text this is referring to the period between ECA’s 2011 and 2016 surveys.
Figures used in this release were taken from ECA's 2016 Accommodation Survey.
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. ECA uses a global network of estate agents, relocation agents and extensive in-house research into worldwide property markets to establish and verify the housing data in the reports. Rental prices are collected annually. 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 for Europe and the Americas were collected in March 2016. The rental prices for Asian locations were collected in September 2016. All local currencies have been converted into US dollars for ease of comparison.