- Rents fall in Singapore - now seventh most expensive in Asia
- Hong Kong still has Asia’s most expensive high-end rental accommodation
- Tokyo has largest rent increases in Asia over the past 12 months
Singapore is the seventh most expensive location in Asia for high-end rental accommodation this year, falling from fourth position in the regional rankings last year. 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 neighbourhoods in Singapore average US$4,535 per month. Although, since 2012, average rents in Singapore have significantly decreased.
Property prices rise and fall based on the laws of supply and demand. When demand decreases, prices will fall. When the number of available properties increases, prices also usually drop. Both factors have significantly influenced rental prices in Singapore over the past five years.
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.
“There have been several contributing factors at play here. Firstly, expatriate numbers in Singapore have stabilised recently, which has curbed demand for rental property in popular expatriate neighbourhoods. Furthermore, improved transport links in Singapore have led to movement away from historically popular districts such as 9-11 to cheaper locations. Singapore has also received more assignees from places such as China, Malaysia, Taiwan and Thailand whose housing budgets are likely to be lower. These factors, combined with an increased supply of property in the market, have caused landlords to respond by reducing rental prices,” said Quane.
Hong Kong still has Asia’s most expensive high-end rental accommodation
Hong Kong remains the most expensive location in Asia for high-end rental accommodation. Rents for an unfurnished three-bedroom apartment across popular expatriate neighbourhoods in Hong Kong average US$10,189 per month.
“Over the past five years, Hong Kong has continued to top our regional rankings. With a high population density and a consistently limited supply of property, average rents in the territory have long been more expensive than in other high-profile cities,” said Quane.
In US dollar terms, rents in the city are more than 14 per cent higher than in Asia's next-most expensive location, Tokyo. Five years ago, rents in Hong Kong were around 20 per cent higher than in the Japanese capital but the gap has decreased significantly since then.
Tokyo is followed by Seoul, Yokohama, Shanghai and Beijing in the regional rankings.
Introduction of VAT contributes to rent increases in China’s Tier-1 cities
Shanghai, which was ranked as having the third most expensive high-end rental accommodation in Asia a year ago, has moved down two places to fifth. This is due to the large rental price rises in Seoul (3rd) and Yokohama (4th). Within China, Shanghai is just ahead of Beijing (6th regionally), Dalian (19th) and Guangzhou (20th).
The average rent of ranked locations in China has generally risen over the past year.
“Our recent review of average rent levels in China suggests that the introduction of VAT is a contributing factor to some landlords raising asking rents this year. Shanghai, Beijing, Shenzhen and Guangzhou all reported notable increases in average rents in the past year. Without the VAT changes, we would have expected many locations to post minimal changes in average rents in 2016 as expatriate demand has faltered amid economic uncertainty,” said Quane.
Tokyo has largest rent increases in Asia over the past 12 months
Across the region, the average rental price for a three-bedroom property averages US$3,124 – just one per cent higher than observed last year.
The largest rent increases in Asia over 12 months were observed in Tokyo, although this still wasn’t enough to overtake Hong Kong. The cost of renting a three-bedroom apartment increased, driven by Japan’s continued strong economic performance and increasing demand from expatriates. This has put pressure on the supply of suitable housing, pushing up prices.
A similar trend was also observed in Indian cities, with average rental costs increasing in Mumbai (8th regionally), New Delhi (16th) and Kolkata (21st). India’s standing in the global marketplace continues to strengthen, where demand for high-quality accommodation in major cities and a persistent lack of supply have kept rents high.
Macau has remained relatively stationary in the regional rankings in the last year, falling one place into 12th position this year.
Notes to Editors
* Please note that when ‘five years’ is referenced in the text this is referring to the period between ECA’s September 2011 and September 2016 surveys.
Figures used in this release were taken from ECA's September 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 were collected in September 2016 and have been converted into US dollars for ease of comparison using the September 2016 exchange rate.
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