Asian cities dominate the list of the world’s top 10 costliest locations for expatriate rental property, according to a study by consulting, outsourcing and investment services provider Mercer on housing costs and practices for employees sent on overseas assignments. Outside of Asia, Moscow holds the No 1 position while New York, Geneva and London are also among the top of the rankings.

The rankings are based on a survey of typical rents for 1-to-4 bedroom apartments and 3-or-4 bedroom houses, furnished and unfurnished in 300 cities. New York is used as the base city, with a score of 100 points. As the index is based on cost comparisons using the US dollar, currency exchange rates have an influence on the rankings. The figures were compiled in late October 2008, using September 2008 exchange rates and then compared with exchange rates in February 2009.

The research provides multinational companies with financial information on rental prices for their expatriate employees in major commercial centres.
Singapore maintains its top 10 ranking among the world's most expensive cities for expatriate housing, but drops one place down to 10th due to weakening demand
“The world’s housing markets have been sliding since 2008, and strong currency fluctuations in the past few months have also had a strong impact on the comparative cost of expatriate housing. The value of the euro has dropped by around 12% against the US dollar since September last year, while the Australian dollar, Brazilian real and the British pound have all lost more than 30% in value against the dollar during the same period,” says Marie-Laurence Sépède, senior associate and research manager at Mercer in a press release.

“Looking ahead over the next few months, we would expect to see a general decline in rent prices due to the economic slowdown. Multinational companies should closely monitor these changes in the markets so as not to lose out on opportunities for cost savings,” adds Sépède.

Tokyo is the second most expensive rental city for expatriates globally — up from third place in 2008, due to an appreciation of around 17% in the value of the yen against the dollar since September 2008. Hong Kong moved down one place to third due to rents decreasing as a result of reduced demand from the economic slowdown.

Beijing moved up four positions to sixth place while Mumbai at position 4, New Delhi (8) and Bangalore (29) continue to receive interest and demand for expatriate rental property.
Other cities in the region have experienced notable changes in their rankings, for a number of reasons: their currency is linked to the US dollar or the rents for expatriates are quoted in US dollars, and there is an oversupply of accommodation.
Singapore maintains its top 10 ranking among the world’s most expensive cities for expatriate housing, but drops one place down to 10th due to weakening demand.
Asean cities have become relatively more expensive than the rest of the world with Jakarta, Kuala Lumpur, Manila and Bangkok all climbing up the rankings. Jakarta rises seven places from 41st to 34th, Manila moves up five places from 45th to 40th, Bangkok climbs four places from 48th to 44th and Kuala Lumpur picks up one position to 36th.
Puneet Swani, Mercer’s head of information product solutions for Asean, says: “Higher rankings do not necessarily indicate that property prices have increased. Apart from Singapore, rents in most Asean cities have remained comparatively stable compared to sharp falls in US and European cities, which accounts for the relatively higher rankings of Asean cities this year.”
He adds: “The difficult economic situation will likely result in an overall decrease in expatriate assignments but Asean as a region continues to grow and remains a relatively good area for multinationals to invest and grow their business during this downturn. If the current conditions are any indication, we may see Singapore continue to move down, with other Asean countries either maintaining the same position or moving up marginally in ranking.”

Moscow is ranked the most expensive city for rents in Europe and globally for 2008. London has moved down five places and is now in ninth position and is the third highest-ranked European city, after Geneva. With the British pound’s decline in value against the US dollar, London residential rents are now falling as the supply of rental property increases.

Middle East
Dubai has the most expensive rents in the Middle East, in 12th place overall. The United Arab Emirates’ dirham is pegged to the US dollar, and the real estate market, though facing some difficulties, has not yet experienced a major fall in rents. However, this is expected to happen in the coming months as the global economic crisis impacts this region. Jeddah in Saudi Arabia is ranked 47, up three places since September 2008. Cairo has moved up seven places to 37.

The Americas
In the US, the rental market in some cities is resilient and the rents are increasing. New York City, in fifth position, has moved up two places, while Los Angeles ranks 17. For more information, visit

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 751, April 20-26, 2009