Mumbai and New Delhi are in the world’s top 10 costliest locations for expatriate rental property, according to a study by Mercer of housing costs and practices for employees sent on overseas assignments.
The list clearly indicates that Asian cities dominate the list. Outside Asia, New York, Geneva and London appeared near the top ranking, while Moscow held the number one position.
Gangapriya Chakraverti, India business leader, Mercer’s information product solutions business, said, “The world’s housing markets have been sliding since 2008, and major currency fluctuations in the past few months also had a strong impact on the comparative cost of expatriate housing.”
| CITY HIGHLIGHTS |
| * Asian cities dominate the top 10 most expensive cities for expats |
| * Currency fluctuations cause significant changes in rankings |
| * London, Singapore and Hong Kong have already experienced a strong decline in rental prices |
She further added, “But in today’s market, it is imperative that companies develop a global talent pool that support international business demands and housing remains one of the most sensitive issues in the expatriate package negotiation process.
This is not only because it is costly, but also because of the significant impact it has on the assignee and the family. 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 fundamental shift in the types of housing being offered in India. In previous years, MNCs provided expat employees with luxurious housing options such as large farmhouses featuring world-class facilities. However, today an increasing number of companies are opting for luxury condominiums, which provide the same kind of facilities but at a lower price. As a result, expats are increasingly located in Gurgaon, Whitefield and Powai as opposed to more traditional locations such as Chanakyapuri, Indiranagar and Colaba. This has also resulted in more cultural integration between expats and the local population.
Clearly, the slowdown has also forced companies to re-examine their international assignment programmes and policies and thoroughly review these with the aim to reduce overall costs, as indicated in an earlier Mercer survey.
Rupam Mishra, leader, Global Mobility, Mercer Consulting India said, “The profile of the typical expatriate assignment has undergone a steady transformation during the past few years. Although expatriates today are not always expected (or encouraged) to maintain their home-country lifestyle, there is a need for a sound base to rely on when creating expatriate compensation packages. Our survey is designed to help key decision makers, as well as assignees themselves with information regarding price category information for the key expatriate-preferred neighbourhoods within a city itself.”