By Nikki De Guzman:
Prime residential rents in key global cities increased 5.1 percent last year compared to 3.5 percent in 2011, according to a report from Knight Frank.
This was a result of potential purchasers shifting to rental accomodation, supported by the strict mortgage market along with limited supply in established markets and soaring prices in emerging markets.
Knight Frank’s Prime Global Rental Index, which compares the performance of high-end lettings across key cities worldwide, now stands 20 percent above its financial crisis low in spring 2009 with Hong Kong seeing the strongest growth of 42.2 percent while Moscow recorded the smallest uptick of 3.3 percent.
“Despite the fragility of the global economy, only London, out of the 16 cities tracked by the index (which includes Tokyo for the first time this quarter) recorded a decline in rents in 2012. The UK capital saw rents fall by 3.2 percent in 2012 as the Eurozone’s on-going turbulence, combined with the uncertainty in the financial sector, kept activity muted,” said Kate Everett-Allen from International Residential Research at Knight Frank.
In Asia, recent property measures introduced by the government helped shift demand to the rental market. As such, prime rents in Hong Kong, Singapore and Beijing moved up 4.9, 0.7 and 2.5 percent in Q4 2012 respectively.
The report added that a challenging business environment has affected housing allowances for expatriates globally, pushing corporate tenants to look for smaller units given their budget constraints.
Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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