SHANGHAI'S rental rates for a three-bedroom apartment rose five percent last year to US$4,000 per month, ranking eighth in the world, according to a survey by ECA International.
The annual survey, which compares rental prices in 92 cities worldwide and helps ECA member companies calculate housing costs for employees, has found Hong Kong is, at US$8,592 per month on average, the world's most expensive city for a three-bedroom apartment in a popular expatriate area.
Beijing ranks 11th with an average rental price of US$3,840 per month in 2006, a drop of six percent year on year.
Even though rental rates in Beijing and Shanghai are among the highest in the world, they are cheaper now compared to 10 years ago. The average rental of a three-bedroom apartment is about 50 percent cheaper in Beijing compared to 10 years ago while in Shanghai it is 40 percent less.
"Ten years ago prices in Beijing and Shanghai were artificially inflated due to a severe lack of quality supply, restrictions on property ownership and where foreigners could reside," said Lee Quane, general manager of ECA International Hong Kong. "Today, however, foreigners are allowed to live wherever they like and more and more high-end properties are being built."
According to the survey, five of the top 10 most expensive cities in the world are in Asia - Tokyo is No. 2, Seoul No. 5, and Mumbai No. 7. New York, Moscow, London, Caracas and Paris round out the top 10.
The survey also found that some of the most significant increases in recent years have been in the Middle East, with rental rates in both Doha and Dubai soaring approximately 130 percent and 100 percent respectively since 1996. Many new luxury properties have been built in those cities, which are positioning themselves as premium business centers.