Insider Monkey

30 Most Expensive Cities Around the World to Rent an Apartment

Ramish Cheema
9 min read

In This Article:

In this piece, we will take a look at the 30 most expensive cities around the world to rent an apartment. For more cities, head on over to 5 Most Expensive Cities Around the World to Rent an Apartment.

Rental costs have been one of the biggest contributors to inflation, which has impacted both developed and developing economies. The housing market was first shaken due to the coronavirus pandemic. Lockdowns and work from home trends changed the industry dynamics. Researchers from the University of California in a freshly published research paper share that the relocation trends due to remote work indicate that workers who had previously worked in urban areas preferred to move to cheaper suburban areas if they were allowed to work remotely full time.

This shift also sees the workers move from high productivity cities to low productivity areas, but interestingly, it also features a classic illustration of the age-old adage of 'the grass is always greener on the other side.' This is because the researchers discovered that while workers in urban areas preferred a suburban environment, those in the suburban areas preferred the amenities of city life and moved to urban areas even though the rents were higher. A report from the National Bureau of Economic Research (NBER) also corroborates these conclusions, describing them as a 'donut effect' where city centers hollow out as people shift outwards to the suburban areas of the same cities. The NBER adds that in the post pandemic work environment, people will most likely follow a hybrid working model, where they commute to work for some days while staying home for others.

Researchers from Princeton, Georgetown, University of California, and Columbia share that this trend of well established and high income workers moving away from city centers is likely to affect the services industry since they often spend large amounts of money at these establishments. They share that rents in areas with high proportion of business service workers dropped in the wake of the pandemic, and this decline in rental prices started from March 2020 and persisted until January 2021. They add that this outward migration can also help drive down rents in city centers over the long term.

However, while the rents dropped until 2021 start, what happened next? Well, as expected, they went up. At least this is what a report from Knight Frank shows. Their report for the third quarter of 2022 shows that during the twelve-month period ending in Q3 2022, global prime rents grew by 10.2%, with London leading the charge through a 19% annual growth in Q3 which had nevertheless slowed down from the 27% growth in Q2. Overall, prime rental growth peaked at 11.9% in Q1 and ended up slowing down in the third quarter. Knight Frank's report for the fourth quarter says prime rent growth increased slightly to 10.3% with Singapore's rents growing by a whopping 28%. This six consecutive quarters of rental growth came after four quarters of consecutive drops, where prime trends dropped by as much as 5% during the fourth quarter of 2022.

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