New Delhi: Mumbai is costlier than New York in terms of rent for expatriates, despite a fall in rentals over the past year and a rise in the value of the dollar compared with the rupee (this means the rents aren’t as high as they were in September 2008)
Indeed, India’s commercial capital is the fourth costliest city in terms of rent for employees on overseas assignments, according to a study by consulting firm Mercer Llc. New Delhi comes in at eighth position in the ranking of 300 cities around the world.
Also See Rentals and Ranking (Graphic)
Moscow, Tokyo, and Hong Kong are the only three cities costlier than Mumbai on this parameter and, despite a global economic slowdown, rents in these cities do not seem to have gone down. Mercer ranks the cities relative to New York rents for expatriate housing that is taken as the base (100).
New Delhi, however, has seen a fall in rents for expatriate housing and has fallen in the list—from sixth to eighth. And Bangalore, despite the slowdown in the IT business, has risen from 31st to 29th.
All three cities continue to see interest and demand for expatriate rental property according to the study.
“One of the reasons for rentals dropping or going up is availability,” said Gangapriya Chakraverti, India business leader, Mercer’s information product solutions business. “In the National Capital Region, there has been a significant increase in expat friendly accommodation whereas this is not so in the case of Mumbai.”
Asian cities dominate the top 10 list. Tokyo is at second position, up from third place in 2008 due to an appreciation of around 17% in the value of the yen against the dollar since September 2008. That also helped it overtake Hong Kong where rents plateaued in the wake of the global economic crisis.
“The world’s housing markets have been sliding since 2008, and major currency fluctuations in the past few months have also had a strong impact on the comparative cost of expatriate housing,” Chakraverti said. “In the last few months, we have noticed a considerable change in the housing choices of companies and multinationals, evidently resulting from the global slowdown.”
The current slowdown has led companies to a shift in the type of housing being offered. In previous years, multinationals provided expat employees with luxurious housing options such as farmhouses. In recent months, however, an increasing number of companies are opting for luxury condominiums which provide the same kind of facilities but at a lower price, the study said.
Expats are therefore increasingly moving to Gurgaon, Whitefield (near Bangalore) and Powai (in Mumbai) compared with traditional locations such as Chanakyapuri (New Delhi), Indiranagar (Bangalore) and Colaba and Malabar hills (both in Mumbai).