Tokyo’s rents are the highest in the world for expatriates followed by Moscow and Hong Kong, where prices surged 22%, the biggest yearly increase, according to a new survey.
Expats living in the Japanese metropolis paid an average $4,352 USD a month for a two-bedroom apartment last year, followed by Moscow at $3,500 USD and Hong Kong at $2,830 USD, the annual report by human resources consultant ECA International said.
The surging value of the Yen – which struck a 15-year high against the US dollar in November – helped push Tokyo to the top of the list, it said.
“Currency movements can have a big impact on costs for companies sending employees on assignment,” said Lee Quane, the regional director of ECA Asia, based in Hong Kong.
“Tokyo is a case in point.”
Rents in Moscow tumbled 25% in 2009 as foreign workers left the city during the global financial crisis, but now expats are returning to the Russian capital, the survey said.
“The return of expatriate demand to Moscow in 2010 and continually tight supply has led to price increases of approximately 17% in the city to $3,500 USD a month,” it said.
Third-placed Hong Kong jumped six places in the survey of more than 120 major cities as rents surged 22% year-on-year, while London and Singapore were in fourth and fifth place respectively.
Caracas, Abu Dhabi, Bogota, San Francisco and Geneva rounded out the Top 10 most expensive cities for expat rents.
Across Asia, rents for two-bedroom apartments rose about seven percent last year compared with a one percent average drop worldwide, as the region bounced back from the global financial meltdown.
“Two years ago we witnessed a drop in rental prices across Asia as a result of the recession,” Quane said, adding that a “rapid economic recovery” has now boosted rents.
Rents in Shanghai and Beijing, ranked 24th and 25th globally, also rose last year after falling in 2009, while the southern industrial city of Shenzhen, ranked 114th, was the cheapest major city for expats living in China.
The Pakistan port city of Karachi had the cheapest expat rent in the survey, with a two-bedroom apartment costing about 17 times less than in Tokyo.
The report focused on the neighbourhoods and types of accommodation typically favoured by expatriates.
The survey found that luxury residential rents in Hong Kong surpassed Tokyo with a three-bedroom apartment in the Chinese city’s glitzy Peak neighbourhood costing an average $16,700 USD a month, about 30% more than Tokyo.
“Land in Hong Kong is already expensive due to the lack of space,” Quane said, adding that low interest rates have also helped push prices sky-high.
It is important to note when examining the survey that it does not take into account certain living costs such as accommodation, utilities (electricity, gas, water costs), car purchase and school fees. These are usually compensated for separately in expatriate packages from cost of living allowances.