Hong Kong Remains Most Expensive Location In The World For Expat Accommodation

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.”

Asia Highlights

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.”

Global Highlights

European rental markets remained relatively stable for now, with London the highest ranked European city in 4th position globally.

“Though rental prices remained largely stable in Europe, the true impact of the Covid-19 pandemic on rent levels has not yet been seen. While many residents left cities to move further out or back home, the pandemic effectively froze many property markets instead of causing immediate downward pressure on rents. However, many European locations are still in the midst of lockdowns as well as experiencing other pandemic-related issues, so we may yet see big drops in European rental markets” said Quane.

In a similar trend to many Asian locations, Australian cities saw big drops in the rankings. Sydney, the highest placed Australian city in the rankings and only Australian location to feature in the global top 50, fell 10 places to 46th. The average expatriate rent in Sydney is now USD 3 553, down over 2.5% from last year.

“After years of small and steady increases, the Sydney rental market is now oversupplied with apartments. The subsequent drop-off in demand due to the Covid-19 pandemic is amplifying this market imbalance” explained Quane.

Istanbul saw one of the biggest falls this year and dropped 60 places in the global ranking. The Turkish city is now the 116th most expensive city in the world to rent in. Costing USD 2 441 per month, it has seen a 30% decrease from 2020.

Quane said: “Turkey continues to battle economic instability and faces an impending financial crisis. There remains a lot of uncertainty in the market and economic policies being tried by the government have ultimately resulted in the local currency dropping against the dollar. This dire financial situation has had an expectedly negative effect on the rental market, with the value of accommodation plummeting.”