The anemic job market in the U.S. and uncertainty over the euro zone economies have resulted in many Americans and Europeans looking to Asia for employment opportunities. But the exorbitant home prices in the region are forcing them to think twice.
Rental prices soared in 2010, according a report by consultancy firm ECA International. The cost of renting a two-bedroom apartment in the region, for example, rose almost 7 percent last year, compared to a 10 percent fall in 2009, the report said.
The return of expatriate employees to Asia since the financial crisis has reinvigorated demand, but the extent of the surge in prices was unexpected, the report noted.
“What has been surprising is the rate at which property prices have bounced back in some places in Asia, particularly Hong Kong and also locations like Singapore,” said Lee Quane, regional director at ECA.
In Hong Kong, the average monthly rental price of a two-bedroom apartment surged 22 percent to $2,830 in 2010, from the year before. While there has been a steady supply of real estate on the island, Quane says much of it has been snapped up by mainland investors, who, for the most part, have not placed their property on the rental market.
In addition to higher demand, the continuing strength of Asian currencies is also contributing to pricier accommodation.
Such is the case in Singapore, where average rental prices for a two-bedroom, unfurnished property in Singapore surged 15 percent over the course of 2010, according to the report.
“Rising prices hurt even more because I get paid in U.S. dollars, which has depreciated 9 percent against the Singapore dollar since I signed my lease seven months ago,” explained American Kevin Khan, who resides in the city’s central business district.
The corporate lawyer at an American firm says rentals at his condominium have risen almost 20 percent since he moved in last July.
“The increasing prices definitely worry me, they may even price me out of my current place,” he said.
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