Hong Kong has leapt six places to become the world's third most expensive city for expatriates to rent a two-bedroom apartment, according to a survey released by human resources consultant ECA International.
ECA's latest accommodation report said Hong Kong's 22 per cent surge in rents last year propelled it from 9th place at the end of 2009, to 3rd position last year.
The average monthly rental for a two-bedroom apartment climbed to US$2,830 last year. This was in contrast to the previous year, when rents fell around 25 per cent in Hong Kong.
'Land in Hong Kong is already expensive due to the lack of space. Additionally, low interest rates, high liquidity in the market and a shortage of supply have contributed to pushing rents up,' says Lee Quane, regional director of ECA Asia.
Tokyo is the most expensive location, with an average rental of US$4,352 for a two-bedroom unit, while Moscow ranked second at US$3,500.
But ECA said luxury residential rents in Hong Kong easily surpassed Tokyo; it said a three-bedroom apartment on The Peak would be US$16,700 per month, about 30 per cent more than an equivalent property in the Japanese capital.
'Currency movement can have a big impact on costs for companies sending employees on assignment. Tokyo is a case in point as the strengthening of the yen against major currencies, including the greenback, means that while rental prices quoted in yen dropped 7 per cent, they increased 2 per cent when converted into dollars,' Quane said.