South Africa

Home rental costs for expats soar in South Africa and Switzerland

by Ray Clancy on October 13, 2015

Finding a place to stay is top of the list for expats when they move to a new country and many rent but they are still facing higher costs in some parts of the world, according to the latest global index.

People sent abroad for a fixed period, for example, may have their rent paid by their employer but others do not. If they move to Cape Town in South Africa or Zurich in Switzerland they are paying a lot more.

moneyHOUSE200These two cities have seen rents rise by 10.2% and 8.3% respectively, according to the latest index from international real estate firm Knight Frank. The firm’s overall prime rental index has risen by only 0.2% in the past year, but this figure hides considerable variations depending on location.

On a regional basis, Africa and Europe recorded the strongest rise in prime rents while in Moscow prime rents are 11% lower year on year in the second quarter of 2015. The index report also says that restrictions on foreign buyers in Zurich and Hong Kong are propping up rental demand.

Despite the index’s muted growth, 10 of the 18 cities tracked by the index saw rents rise during the 12 months to June 2015. Cape Town leads the rankings with prime rents ending the year to June 10.2% higher.

A shortage of rental stock coupled with the introduction of tighter credit regulations has led to a spike in demand as potential home buyers find themselves having to look for rental accommodation instead, according to Kate Everett-Allen, a partner in Knight Frank’s residential research team.

“Although sales markets in cities such as Singapore, London and Nairobi are pausing for breath, in most cases due to policy intervention be it via taxes or mortgage regulation, the commonly held perception that prime rental markets will, in contrast, start to accelerate isn’t holding true,” said Everett-Allen. “Instead, the performance of our Prime Global Rental Index closely mirrors global GDP and with sluggish growth considered the new normal the heady days of 5% annual growth look unlikely to be repeated for some time.”

She explained that this is good news for high end residential tenants, in particular those relocating to the United States where the strong dollar could be mitigated by slower rental growth.

Indeed, according to Worldwide ECR, 45% of global multinationals expect international assignments to increase but this figure rises to 54% amongst those with headquarters in the US. “A stronger dollar means US companies are expanding once again, to some extent filling the void left by the retraction of emerging markets in recent years,” Everett-Allen said.

But she pointed out that Zurich and Hong Kong are two exceptions to the sales/rental relationship described above. “Restrictions on foreign buyers, namely Lex Weber in Zurich, and Buyer Stamp Duty in Hong Kong, have strengthened rental demand in these two key financial centres,” said Everett-Allen.

Moscow occupies the bottom ranking for the third consecutive quarter. Based on Knight Frank’s basket of properties which reflects the current 78%/22% split between Rouble and USD set rents, prime rents have slipped 11% over the last year.


Thumbnail image for More South African expats are being tempted back by a homecoming campaign

More South African expats are being tempted back by a homecoming campaign

August 19, 2015 Africa

More South African expats are being tempted to return home by highly skilled jobs especially in engineering, finance, medicine and construction, recruitment experts suggest. Overall more than 400,000 white expat South Africans have returned since many left due to the financial crisis in 2009 for better job prospects and pay abroad. Now data from Statistics […]

Read the full article →
Thumbnail image for Healthcare in South Africa varies from the excellent to very poor, expats warned

Healthcare in South Africa varies from the excellent to very poor, expats warned

September 2, 2010 South Africa

Interest in living and working in South Africa has increased on the back of the country’s successful hosting of the football World Cup but potential expats are being warned that the health care can be diverse. Too many people assume wrongly that the healthcare system in South Africa is on par with the NHS in […]

Read the full article →
Thumbnail image for Changing lives of British expats in South Africa to be examined

Changing lives of British expats in South Africa to be examined

August 9, 2010 South Africa

The changing lives of British expats in South Africa are to be examined by two university academics that wanted to find out the effects of recent political and social change. Dr Daniel Conway of Loughborough University and Dr Pauline Leonard of the University of Southampton want some of the estimated 212,000 British expats in South […]

Read the full article →

Cape Town City Guide

August 17, 2007 South Africa

Being the third most populated city in all South Africa, Cape Town has been the most widely visited city in the peninsula due to its beautiful geography. The Cape Floral Kingdom provides a beautiful natural setting both to the locals and guests and is considered as one of the most livable cities in the world. […]

Read the full article →

Port Elizabeth City Guide

August 17, 2007 South Africa

Port Elizabeth is a city in the Eastern Cape Province of South Africa that is one of the country’s foremost tourist destinations, drawing in thousands of visitors annually. The city’s mild climate and endless stretches of gorgeous beaches ensure a steady flow of tourists all year round. Often referred to simply as PE, Port Elizabeth […]

Read the full article →

Johannesburg City Guide

August 17, 2007 South Africa

Johannesburg is found in South Africa. It is the biggest and most populous city in the country with over 3 million residents. Johannesburg is the capital of the wealthiest province, Gauteng as well. The metropolitan area is included in the top 40 largest all over the globe. The city has been considered a global city […]

Read the full article →

Durban City Guide

August 17, 2007 South Africa

Durban is the second largest industrial center of South Africa. Located on the eastern coast of the country, the city is also the one of the fastest growing urban districts in South Africa, registering a combined population of more than 3.2 million people in 2001. The city’s gentle subtropical climate all year ’round and its […]

Read the full article →

Soweto City Guide

August 17, 2007 South Africa

Soweto is an urban community in Johannesburg, in the Gauteng province of South Africa. Drawing its name from the abbreviation of “South Western Townships”, Soweto has played a prominent role in the country’s troubled history, having been the center of operations of many anti-apartheid activists including former South African president Nelson Mandela. Following the dismantling […]

Read the full article →

Pretoria City Guide

August 17, 2007 South Africa

Pretoria was founded in 1855, and is one of the three capital cities of South Africa. Named after the prominent South African political leader and general, Andries Pretorius, the city is a multifaceted conglomeration of different cultures and nationalities, all of which come together to form a uniquely diverse society. The city is gifted with […]

Read the full article →

Bloemfontein City Guide

August 17, 2007 South Africa

Bloemfontein is the capital city of the Free State Province of South Africa. The Sesotho name of the city is Mangaung, which means “place of cheetah” it, also means “flower spring” or “fountain of flowers” in Dutch and Afrikaans. Due to the abundance of flowers and the annual floral festivals held in the place, Bloemfontein […]

Read the full article →

Jobs in South Africa

August 8, 2007 South Africa

South Africa is the continent’s largest economy.  Half a million new jobs were created in just one year and 1.6 million jobs over a five-year period.  The trade industry, which employs more than three million people, accounts for 24 % of new jobs; the service industry, which employs 2.3 million people, accounts for 18% and […]

Read the full article →