– Expatriate rents have dropped in Singapore by 1.3% to an average of USD 4 215 per month
– Singapore remains in Asia’s top 10 most expensive locations for expatriate rents, and is in the top 25 most expensive locations for expat rents globally
– Hong Kong is the most expensive location in the world for expatriate rents, with an average monthly rental cost of USD 10 929
– Globally, New York and Tokyo are in second and third place respectively for expatriate rents
Singapore rent prices for expatriates have continued to drop here and are now on average, USD 500 cheaper per month than in 2016.
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.
Rental prices for an unfurnished, mid-market, three-bedroom apartment in areas commonly inhabited by international executives in Singapore average USD 4 215 a month, a drop of 1.3% compared to the previous year.
“Reductions in the population of non-residents in Singapore, a key driver of rental demand, has led to continued drops in rental prices for expatriates,” said Lee Quane, Regional Director – Asia at ECA International. “Recent announcements in the Singapore Budget 2019 have further limited the proportion of foreign workers that companies in the services sector can employ, to 35% by 2021. This seems to imply that the downward trend in rents will continue, as the availability of properties increases with little anticipated rise in demand.”
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 for accommodation in areas typically inhabited by expatriate staff in over 320 locations worldwide.
Asia Highlights
Hong Kong remains the most expensive location in the world for expatriate rent, with typical expatriate accommodation costing an average of USD 10 929 per month – an increase of 4.9% from 2018.
Quane added: “The main driver of increased rent across Hong Kong in 2018 was the limited availability of housing, which has been a long-term issue for the Hong Kong housing market. Rent increases are not just limited to central Hong Kong anymore either; rents are expected to rise throughout outlying neighbourhoods in 2019 too, as international firms seek more affordable office spaces and leverage options in cheaper suburbs.”
Rental costs in Tokyo have risen at a quicker rate than Hong Kong, with typical expat accommodation now averaging USD 8 668 per month. This rise of 6.9% makes Tokyo the second most expensive Asian location in ECA’s survey.
Quane said, “While Tokyo’s rental market has been historically tight, 2018 saw a significant upturn in the rate of rent increases. A rise in tourism, coupled with the accompanying increase in landlords preferring to lease out accommodation on a short-term basis, have contributed to rising costs in recent years. With both the 2019 Rugby World Cup and the 2020 Olympics set to be hosted in Tokyo, we have observed a major surge in business interest in Japan’s capital. All of these factors will contribute to the increasingly limited availability of suitable rental accommodation in Tokyo, with rent increases expected to continue into 2019.”
Chinese cities endured a mixed fortune throughout 2018, with major rent increases seen in some locations, but static or decreasing levels of rent in others.
Shanghai was the highest placed Chinese city and the eighth most expensive city for expats to rent in globally, averaging USD 5 305 per month.
Quane explained, “With a new property tax mooted to be introduced in Shanghai from 2020, many landlords are now choosing to sell their properties rather than to continue renting them out. This has led to a reduction in the availability of rented accommodation, prompting some rent increases.”
Similarly, Shenzhen saw a big rise in the average rent for overseas workers. Typical monthly rental costs in Shenzhen are now USD 2 795 – an increase of over 10%.
Quane said, “Shenzhen continues to be a city that attracts high demand for rented accommodation, as a result of both its local economy and its proximity to Hong Kong. The market has proven particularly tight in 2018, leading to this trend of high rental prices, which will most likely continue for the foreseeable future.”
Bangkok entered the top 10 most expensive Asian locations for expat accommodation for the first time, following the city’s rise in average rental prices this year.
“Increases in rents reflect a continuation in foreign investment in Thailand. Thailand remains a popular regional destination for many MNCs. However, they have been joined by newly globalising companies from China, which has led to a higher demand for rental accommodation from an expatriate population that typically rents in a relatively small geographical area in central Bangkok. Furthermore, the growth in tourism in Bangkok has also had an impact on rental prices, given the increase in the number of properties being converted from long-term to short-term rental to cater to this demand,” explained Quane.
Expatriate rents in Kuala Lumpur saw a rebound after a sustained decline between 2015 and 2017, with the average rental cost for expatriates now at USD 1 621 per month, an increase of USD 112 from the year before.
Quane said, “The domestic economy has been comparatively weak in Malaysia over the past few years, and the delivery of large stocks of properties to the rental market was not balanced by weaker demand. Rents for apartments staged a recovery in 2018, but Kuala Lumpur is still very affordable for a major city in the region.”
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