Singapore ranks as one of the most expensive destination for expats looking to relocate in Asia and seek an international career. According to findings from the latest Accommodation Survey published by ECA International, Singapore ranks as the seventh most expensive location in Asia for high-end rental accommodation this year.
Tokyo has the largest rent increases in Asia over the past 12 months and Hong Kong is still Asia’s most expensive high-end rental accommodation. 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,” said Lee Quane, Regional Director, Asia – ECA International.
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.
“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 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 percent higher than in Asia’s next-most expensive location, Tokyo. Five years ago, rents in Hong Kong were around 20 percent 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 3rd most expensive high-end rental accommodation in Asia a year ago, has moved down two places to 5th. 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 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.
Asia Highlights
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 1 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.
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 period of the survey was between September 2011 and September 2016 – over the five year period.
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