A new survey by one of the world's largest human resources firms says Hong Kong has the world's priciest apartment rents. As Naomi Martig reports from Hong Kong, Asia's growing economy and a demand for higher-end housing is to blame for a general price spike in housing throughout Asia.
ECA International says renting a three-bedroom apartment in popular neighborhoods in Hong Kong averages more than $9,700 a month. That is more than double Asia's average for executive-level housing, which ECA says was around $3,800 a month in 2007.
Lee Quane, ECA International's general manager in Hong Kong, says Hong Kong rents increased by 15 percent in 2007. He says the rest of the region also saw a rise in rents for managers, executives and expatriate business people.
"The cost of accommodation has increased at a faster rate than it has elsewhere in the world to the point that the average cost of expatriate accommodation in Asia is more expensive than the global average," he said.
Quane says Asia's growing economy and increased demand for high-end housing from foreign executives in Hong Kong have driven rents up.
The increase is good news for landlords in Hong Kong, but for renters and real estate agents, the high costs could hurt.
Quane says that as Asia becomes more expensive some companies may find it is not cost-effective to move staff to the region.
However, Simon Lo, director of research for property firm Colliers International, says higher rents are not likely to hurt Hong Kong's ability to attract businesses. He says demand for higher-end apartments is good, because company officials still want the economic benefits of working near mainland China.
"Hong Kong is the place to be if you want to do business with China," he said. "And then the demand for these apartments or even serviced apartments is really [in] strong demand."
Other Asian cities that made ECA's top 10 global list were Mumbai, Seoul, Singapore and Ho Chi Minh City. Lee says Singapore saw Asia's biggest year-on-year rental increase of more than 30 percent last year.
Globally, the average rent for executives was about $2,900. Moscow ranked second in cost, followed by New York, Tokyo and London. The survey said Karachi is the cheapest city in the world for expatriate executives to rent a three-bedroom apartment.