asia pacific updates...in xujiahui, only high-rise apartments and serviced apartments. there is good...
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Issue 20, September 2014 Page 1
ASIA– PACIFIC UPDATES Dear Friends,
Welcome to the latest edition of the Reloc8 Asia
Pacific Group Newsletter.
I think all of us in the relocation industry appreciate
that - of all the areas of our business - housing is
perhaps our single most important concern.
Without a good place to live, it is pretty difficult to
imagine a successful relocation outcome. That is
why we have decided to devote this entire issue to
housing in our region. In this issue you will find we
have outlined key trends in the rental housing
market in each of our countries, provided price
ranges for 2 bedrooms apartments and for serviced
apartments as well. We hope this will help
everyone achieve better results in this most critical
sector of our business. Rental figures and feedback
indicate that demand for serviced accommodation
is increasing region-wide, and rental prices in most
areas have risen in response.
As always, if you have clients travelling to our part
of the world please let us know as we will always
do our best to help them find a happy home.
(www.reloc8asia.com)
Kind regards
Ken Arbour
President
www.reloc8asia.com
Housing Updates
Housing rentals are one of the major costs companies face when assigning their employees to work overseas, and in
the Asia Pacific region prices can change rapidly. Please see the Table below which lists typical rental prices in
September 2014 for Low, Medium and High standard 2-bedroom apartment accommodation in each of our cities. We
include a comparison with 2013, so you can more easily see if there has been a fluctuation. We have also pointed out
any key trends in the rental housing market in each of our regions. This information is a general guide only. Please
contact our members for more detailed information.
Page 2 www.reloc8asia.com
Housing Market Trends, September 2014
Location
Prices for a 2-bedroom
apartment (USD) September
2013 Medium
Prices (USD)
Comments on
Availability Other Trends / Market Changes
Low Medium High
Lower
North
Shore,
Sydney
(Australia)
2,600 2,350 3,900 2,900
In this area,
there is good
supply of
properties of
this size. There
is no significant
pressure on
price.
A vacancy rate of 3% (% of rental
properties not currently leased to tenants)
is considered to be a "balanced market"
with no undue pressure on rentals, and
reasonable choice for prospective tenants.
However recent experience in Sydney has
been of much lower vacancy rates ( 1.4% in
the March quarter of 2014) placing
pressure on new arrivals to make decisions
quickly from a limited number of options.
Vacancy rates do fluctuate seasonally, and
the winter months of July and August have
seen a slight improvement to 2.0%.
Xu Jia Hui,
Shanghai
(China)
2,200
-
4,300
4,550
-
7,400
8,100
-
10,600
4,200
-
8,300
Xu Jia Hui is
one of the
more popular
areas to live in
in Shanghai.
There are no
villas available
in Xujiahui,
only high-rise
apartments
and serviced
apartments.
There is good
availability for
all apartment
sizes.
Expatriates are
spread
throughout the
city.
Multinational companies (MNCs) continue
expanding their investment in Shanghai,
which means there is a continued inflow of
expatriates. The continued growth of MNC
investment in Shanghai also brings with it
more local hire and domestic transfers into
Shanghai. This has increased the demand
for low-medium range properties across
the city. The higher demand for lower
budget housing, plus increases in the cost
of living, have pushed up the cost of lower
budget housing. Meanwhile, the demand
for good expatriate-style accommodation
in the usual hotspots of Shanghai remains
strong.
Property purchase prices are falling in
Shanghai. As a result of government policy
intervention, major real estate investment
activity has slowed in 2014, and no major
residential projects have come onto the
market this year.
Rental prices for mid to high end
properties are expected to remain at
current levels or increase slightly in key
areas of Shanghai.
Issue 20, September 2014
September, 2014
Page 3 www.reloc8asia.com
Serviced Accommodation Updates
Location
Prices for a 2-bedroom
apartment (USD) September 2013
Medium Prices
(USD)
Comments on
Availability
Other Trends / Market
Changes
Low Medium High
Mumbai
(India)
907
-
1,320
1,320
-
1,800
1,800
-
2,640
1,210 - 1,615
Availability
continues to be
very good. Several
new expatriate
standard housing
communities are
currently under
construction and
estimated to be
completed by
2015.
Mumbai has seen a drop in
demand for high-end expat
rental properties. More and
more relocations are utilizing
localized packages. Even
though the demand may
have reduced, it has not
impacted the rental prices
and Mumbai continues to be
amongst the most expensive
cities in India in terms of
housing.
Roppongi,
Akasaka,
Azabu/Hiroo,
Tokyo
(Japan)
3,000
-
5,000
6,000
-
8,000
10,000
-
12,000
7,500
There is moderate
availability in all
price ranges.
The market has been steadily
rising for the past 3 years and
is expected to continue at
about 5%to 10% per annum.
Bangsar,
Kuala
Lumpur
(Malaysia)
1,600
-
2,500
2,800
-
4,900
5,000
-
10,000
2,500
-
4,000
Low end and
medium end
apartments are in
the highest
demand so
availability could be
stressed during the
summer months.
Low to medium range
property prices continue to
rise at a slower pace than
previously. The Ringgit has
been strengthening against
other currencies, particularly
the USD, which has
contributed to an increase in
rental rates.
Issue 20, September 2014
Page 4
Location
Prices for a 2-
bedroom apartment
(USD)
For
Comparison:
September
2013
Medium
Prices (USD)
Comments on
Availability
Other Trends / Market
Changes
Low Medium High
Auckland
(New Zealand) 2,440 3,190 3,500 2,900
In Auckland demand
for 2 bedroom
apartments is very high
and availability very
low. In fact, there are
very few middle range
apartment complexes
in Auckland.
Free-standing houses
are much more
popular.
The overall housing market continues
to expand with new facilities opening
and others under construction. The
increase in supply is being absorbed by
rising demand. Factors in the growth in
demand continue to include the
increase in project-based assignments
of 1-6 months duration. Rentals in
Auckland are rising at 5-10% per year
despite the growth in supply. This is
pushing rentals up. In Wellington,
however, rental prices and demand
remain stable.
Makati City/
Pasig City & The
Fort, Taguig City,
Manila
(Philippines)
2,000
-
2,500
3,000
-
3,500
4,500
-
5,000
3,000
-
3,400
In Makati City, homes
within gated
communities are
scarce due to the
demand from
families. However,
there is an ample
supply of
condominiums in the
CBD, as well as a large
supply of
condominiums in both
Pasig City and The
Fort, and in Taguig
City. Makati’s luxury
inventory will increase
by 800 units within
the next 3 years. The
Fort will be adding
some 510 units in
total by the end of
2014: the first tower
of the new Arya
Residences complex
was completed early
this year, and the top
floors of the second
tower are nearing
completion.
The building boom has rallied on
unabated for nearly seven years,
gaining even more velocity in the last
three. Activity in Makati is
concentrated in the high-end and
luxury residential sector as the district
remains the first choice for prime
condominiums. The market is divided
between owner-occupants and
investors hoping to turn a profit,
however the majority of the
investment is driven by demand from
secondary tenants searching for units
available for lease. Investors and
expatriates drive the demand for
spacious and high-end apartments in
premium residential condos, while
demand for subdivisions, townhouses,
and condominiums is driven by the
increased purchasing power of the
middle-class. The high-end residential
market is expected to have modest
growth in 2014 as a result of
weakening buyer sentiment. There are
a number of high-end developments
throughout the central business
districts which will keep the supply and
demand balanced, resulting in a
modest rent and price evolution.
Issue 20, September 2014 www.reloc8asia.com
Housing Updates
September, 2014
Page 5 www.reloc8asia.com
Location
Prices for a 2-bedroom
apartment (USD)
For
Comparison:
September
2012
Medium
Prices (USD)
Comments on
Availability
Other Trends / Market
Changes
Low Medium High
Novena,
Orchard
(Singapore)
3,650 5,250 7,500 6,250
Availability is good.
Rental prices have
been declining since
2013 because of
greater supply and a
slowdown in
demand. The decline
is across different
price bands but
includes popular
condos which have
shown more
resistance to decline
in the past.
With a greater supply of condos
coming on the market, we expect
rents to fall further. Landlords are
becoming more realistic and are
not holding out for higher rents.
Landlords are also more receptive
to personal leases as more
companies move away from
corporate leases for their
employees. The rental market
moves very quickly in current
market conditions where
landlords are willing to negotiate
and tenants recognise a good
bargain.
Hannam/
Itaewon
Area,
Seoul
(South
Korea)
1,500
-
2,000
2,500
-
4,500
4,500
-
6,500
2,500
-
4,500
Availability of 1 and 2
-bedroom apartments
is low, because they
are uncommon (with
the exception of
serviced apartments.
Apartments generally
have 3 bedrooms,
and there is high
availability.
In Seoul, due to the loosening by
the government of various
regulations on property
transactions, which were aimed at
energizing the property market and
increasing transactions, the sales
and purchase property market is
beginning to emerge from a
long-term recession. During the
last couple of months, residential
property sales have increased
considerably compared to the
same period in 2013. While prices
haven’t yet gone up, there is a
strong expectation that they will in
many areas. However, despite the
fact that people are starting to
consider buying properties instead
of renting, it may be premature to
conclude that the Korean property
market recession is over. To date,
we haven’t seen much impact on
the cost of expatriate housing.
Rentals remain at levels similar to
those in 2013.
Serviced Accommodation Updates
Issue 20, September 2014
Housing Updates
Page 6 www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom
apartment (USD) For
Comparison:
September
2013 Medium
Prices (USD)
Comments on
Availability
Other Trends / Market
Changes
Low Medium High
Xin Yi, Nei
Hu Area,
Taipei
(Taiwan)
2,735
-
3,100
3,735
-
5,000
5,235
-
6,670
3,485
-
4,885
Availability is high.
Most expatriates still
prefer to be live in the
Xiyi and Daan districts
rather than the Tian
Mou district, due
to the more
convenient public
transportation system
and living space
there. On other hand,
landlords in these
popular areas prefer
to rent out properties
instead of selling
them, due to high tax
in Taiwan. This
creates competition
to furnish apartments
smartly with modern
equipment. This has
directly affected
rental prices which
have risen this year.
In 2014, real estate prices in the
region are predicted to continue
their upward trend not just
because of the rising prices of
some construction materials,
but also because of an
underlying strong demand from
end-users, occupiers and
investors. Due to the high tax
costs involved in selling
apartments in Taipei, most
people tend to rent instead of
buying. This also promotes
higher rental prices . According
to government statistics,
apartment rental fees have risen
by 10-15% in different districts
in Taipei, particularly for
apartments in new buildings in
districts like Xinyi and Neihu,
which attract foreigners wanting
to live in new communities with
easy access to public
transportation and the subway
system.
Sukhumvit,
Bangkok
(Thailand)
950
-
1,750
1,750
-
3,000
3,500
-
5,300
1,750
-
2,000
Availability for 1 and 2
-bedroom apartments
in all ranges is high,
although there is
competition for
certain locations.
Homes close to the
Sky Train are
particularly in
demand. There is a
shortage of A Class
3-4 bedroom
properties, especially
homes within
compounds.
The market remains unchanged
and stable for A Class 3-4
bedroom properties, and
demand for properties that are
close to the Sky Train is still very
high. The Bangkok rental
housing supply and demand is
generally well balanced,
however high end rents are
increasing, in particular for
2-bedroom apartments, with
steep increases for some new
developments.
September, 2014
Australia
The market continues to expand with new facilities opening and under construction, and the increase in
supply being absorbed by rising demand. Factors in the growth in demand continue to include the
increase in project-based assignments of 1-6 months duration. Costs are rising at 5-10% per year
despite the growth in supply.
Page 7 Issue 20, September 2014 www.reloc8asia.com
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Melbourne
(Australia) 7830 9350 7450 Supply is reasonable when
booked two or more weeks
ahead. Surcharges apply for
peak seasons such as
Christmas and New Year Sydney (Australia) 9760 13000 9270
Serviced Accommodation Updates
Housing Updates
China
Beijing
Serviced apartments are generally located in the CBD and Dongzhimen areas (the east side of Beijing).
There is very limited supply on the west side of Beijing. Small sized apartments, for example studio or
1-bedroom apartments can sometimes be hard to book. They are very popular for short-term stays,
especially if the compound accepts tenants on a monthly or even daily rental basis. (In general, “short
term” means a 1 or 3-month minimum stay). A number of investment companies are purchasing
individually-owned apartments and renting them out at serviced apartment rates after redecoration, in
popular non-serviced residential compounds. The condition of such apartments does not, however,
compare to that in standard serviced apartments. While there are many serviced apartment complexes
in Beijing and Shanghai, they exist in only a few of the Tier 2 cities and do not exist at all in Tier 3 or 4
cities. In those cities, even a 4 star hotel may be difficult to find.
Shanghai
Shanghai has a large amount of serviced accommodation, ranging from local hotel chains to high-end
international brands. Top-end serviced accommodation is available in prime locations in Shanghai’s
CBD. Many companies prefer to house their short-term staff/single staff in serviced apartments due to
their central location. High-end serviced apartments in the CBD areas are always in demand, and
occupancy rates are very high. The main providers are Ascott, Fraser, JW Marriott, Kerry Center, Shama,
and Lanson Place. These generally provide studio apartments, 1-bedroom, 2-bedroom, 3-bedroom,
4-bedroom, and penthouse options. Due to the slow-down in the property sales and purchase market
in 2014, no new serviced apartments have come on to the market this year. In addition, some old
serviced apartments are closed for renovation which will, in the short term, also impact on available
supply.
Page 8 www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on Availability
Medium High
Dongzhimen
and CBD area,
Beijing (China)
5,000 - 6,700 7,500 - 9,200 5,000 - 6,500
The occupancy rate in most of the serviced
apartments remains at 80-90%. Most
require long term leases, though some
serviced apartments will consider short
term leases if they have vacancy.
Shanghai
(China) 6,500 - 8,100 8,100 - 10,600 6,500 - 7,800
Expat-style serviced apartments in the CBD
are constantly in high demand, 2-bedroom
apartments in particular. Puxi has less
availability than Pudong in general. There
have been no new serviced apartments
built in Xujiahui. Supply and demand is
balanced in this region - there is no signifi-
cant shortage of or demand for serviced
apartments.
September, 2014
Page 9
India
Most Tier 1 cities have good quality serviced apartments. In Mumbai the best are the Taj Wellington
Mews, Grand Hyatt Residences, Oakwood, and Lakeside Chalet residences by Marriott. In Bangalore we
have the Grand Mercure, Oakwood and Alila in the premium category. They often provide discounts on
long term bookings or inclusions such as complementary internet, airport transfers, breakfast etc. There
are also several local serviced apartment providers which are of good quality and cater to the expatriate
population. The Ascott, Marriott, Hyatt and Oakwood continue with their expansion plans across India
and will soon have new operational properties. Since Tier 1 cities are big cities and traffic conditions
continue to deteriorate, it is advisable to find an option close to your workplace.
Tier 2 cities have privately run serviced apartments. Their quality may not always be very good. Most
expatriates prefer staying in hotels in these locations.
Issue 20, September 2014 www.reloc8asia.com
Location
Prices for a 2-bedroom
serviced apartment
(per month)
September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Mumbai
(India) 5,900 10,000 N/A Most of the good quality serviced
apartments have high occupancy
rates. It is therefore advisable to
book in advance. Bangalore (India) 4,500 9,000 N/A
Serviced Accommodation Updates
Housing Updates
Page 10
Japan
Serviced apartment supply in Tokyo is very different from other cities. Tokyo has major suppliers such as
Oakwood, Ascott, and Mori, who have multiple sites. Tokyo also has a large supply of second tier
accommodation that is more Japanese oriented (that is, smaller units), provided by a variety of other
suppliers. Osaka/Kobe ranks second, with a few major properties that offer quality apartments,
however the number is far fewer than Tokyo. Outside of these two cities, serviced apartments become
much more difficult to find.
Malaysia
Serviced apartments in Kuala Lumpur are of good quality, including big names like Ascott , Lanson Place
and Somerset. In other cities such as Penang and Johor, the selection of serviced apartments is not as
good. There are two or three serviced apartment complexes in these locations, but they are old and not
very well maintained. We are now, however, seeing new serviced apartments being built in these cities
which will be available in about two years.
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013 Medium
Prices (USD)
Comments on
Availability
Medium High
Minato-ku, Tokyo,
(Japan) 7,000 $10,000 6,500
Availability is extremely
tight.
Osaka, (Japan) 7,000 - 10,000 15,000 - 17,000 7,000 - 10,000
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013 Medium
Prices (USD)
Comments on
Availability Medium High
Bangsar, Kuala
Lumpur
(Malaysia)
2800 - 4500 4800 - 6000 2500 - 4000 Serviced apartments
are readily available
except during the
summer months. Penang (Malaysia) 1000 - 1500 2,000 2,013
Page 11
September, 2014
New Zealand
Serviced accommodation in New Zealand remains stable.
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013 Medium
Prices (USD)
Comments on
Availability
Medium High
Ponsonby & Parnell
Areas, Auckland
(New Zealand)
5,400 5,875 N/A
Available
Wellington
(New Zealand) 4,675 5,615 N/A
Serviced Accommodation Updates
Page 12
Housing Updates
Philippines
New players in the hospitality industry have recognised the demand for serviced accommodation and
have begun renting fully furnished apartments from individual owners, converting these apartments
into boutique accommodation and providing the same services offered by serviced apartments.
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Makati City, Manila
(Philippines) 4,300 7,000 5,600
There is limited serviced
apartment accommodation in the
areas of Makati City and the Fort
Global City. Ascott and Oakwood
are the only serviced apartment
groups that offer short-term or
temporary housing . Ascott will be
opening at the Fort at Global City
at the end of 2014.
Cebu City
(Philippines) 2,930 5,300 3,500
Availability is limited as Cebu is
only now seeing the need for
serviced apartments. Most
short-term expatriates are placed
in corporate hotels such as
Diamond Suites and Marriott.
Page 13
September, 2014
Singapore
There are different types of serviced accommodation in Singapore. Regular serviced
apartments are licensed to provide serviced accommodation with a minimum requirement of 7 days
stay. There are also serviced residences that provide short or long-term lease accommodation. These
are mostly privately owned properties that are collectively managed by a provider or one owner. Prices
vary with location, length of stay and the standard of quality of the property. A word of caution for
those considering a short lease with a non regular serviced apartment: There have been issues with
authorities in the past with privately owned properties being operated as serviced accommodation on
short leases. These are usually apartments found in private condos and they tend to offer more
competitive prices than the licensed providers.
South Korea In Korea, with the exception of in Seoul, there are no serviced residence options.
There are some very small-scale operations, but they cannot really be classified as serviced apartments
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Novena, Orchard
(Singapore) 8,000 - 10,000 10,500 - 12,500 10,000
2014 has seen a fall in
occupancy in many serviced
apartments. They are therefore
more open to negotiation,
particularly for longer leases.
Lower-cost serviced apartments
will always be in higher
demand.
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Hannam/ Itaewon
Area,
Seoul (South Korea)
5,000 - 6,000 8,000 - 12,000
170 - 200 (daily rate
based on the con-
tracted term)
Availability is tight
Serviced Accommodation Updates
Page 14
Housing Updates
Taiwan
Choices of serviced accommodation are very limited in Taiwan, especially
outside the capital city of Taipei. In Taipei, fewer than five serviced apartment complexes are available
for temporary stays and these range from basic units to high-end ones. Of these, only two are full
serviced apartments and are mostly operated for long-term occupiers. In Taichung, where demand is
lower, the supply is also very limited. Most expatriates who would usually choose serviced
accommodation options choose instead to stay in hotels.
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013
Medium Prices
(USD)
Comments on
Availability
Medium High
Taipei (Taiwan) 3,500 8,670 3,500
Although there is an increasing
number of serviced
accommodation rooms becoming
available in the capital, demand is
also increasing. Quality and
location are two major concerns.
Taichung (Taiwan) 4,500 6,330 4,500
There are very few serviced
apartments in Taichung so
finding availability can be very
challenging at times. Hotels are
preferable.
Page 15
September, 2014
Thailand
There is a very good supply of serviced apartments in Bangkok, with many new properties launched in
the past few years. International providers like Marriott, Oakwood, Ascott, Somerset and Fraser and a
local group called Centre Point are present in Bangkok. Outside Bangkok the availability is low. Serviced
accommodation is popular as an alternative for business travellers as well as for long-termers.
www.reloc8asia.com Issue 20, September 2014
Location
Prices for a 2-bedroom serviced
apartment (per month) September 2013 Medium
Prices (USD)
Comments on
Availability
Medium High
Sukhumvit,
Bangkok
(Thailand)
3,200 4,700 4,000 Good
Serviced Accommodation Updates
Page 16
Woodhams Relocation Centre
Australia
Nick Woodhams
Asia Pacific Access
China
Shelley Warner
Ikan Relocation Services
India
Anjana Ganpathy
Tokyo Orientations
Japan
Kenneth Arbour
Pathfinder Relocation
Malaysia
Triona Chelliah
Annexus Relocation
Philippines
Dornet G. Venturanza
Woburn International
New Zealand
June Ranson
Asian Welcome
Singapore
Lee F. Wong
Reloko
South Korea
Yonjoo Oh
Eastgate Relocation
Taiwan
Mich Chu
Pacific Orientation
Thailand
Leo E Alexandersen
www.reloc8asia.com Issue 20, September 2014
Our Members