In New York City, luxury rents average £2,300 (US$3,238) per week, making the city home to the most expensive prime rentals in the world, according to an analysis being released tomorrow by the Savills World Research team.
The price increase of 5.4% from last year has been aided by a wealth of new prime supply that’s boosted the quality of prime rental market and, in turn, rents. But discounts are increasingly being offered to fill new buildings (and achieve these higher rents on the books), the analysis said.
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As well as being priciest, New York City was recently dubbed the top city for the world’s wealthiest by Knight Frank’s wealth report released Wednesday. The report examined the five areas that matter most to the world’s richest: overall desirability, wealth, investment, lifestyle and future. New York City was ranked top in each.
Tokyo is the second most expensive global city with prime rents averaging £1,940 (US$2,735) per week—all prices in the analysis from the British firm were in GBP—an increase of 7.7% from 2017.
Despite logging price falls of 2.9% from last year, London still ranks third, with rents costing an average of £1,700 (US$2,396) per week. The British city could soon be overtaken by Hong Kong, currently ranked fourth.
Luxury rents in Hong Kong are just behind those in the U.K. capital, at £1,690 (US$2,382) per week, but have risen in the past year (2.7%) while London’s have fallen.
Amsterdam’s prime rents increased by a substantial 19.8% in 2017, putting it in fifth place at £1,370 (US$1,931) per week. Rents in the city have been driven up by relocating expats coupled with a shortage of stock, the analysis said.
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Two Chinese cities feature in the top 10—Beijing and Shenzhen, with prime rents of £1,200 (US$1,691) and £1,020 (US$1,438) per week respectively. Dubbed China’s Silicon Valley, Shenzhen—where the population has risen from 300,000 in 1980 to 12 million—has seen a rising number of wealthy domestic tenants and expats fueling prime rental demand.
Away from the luxury sector, San Francisco—which ranked ninth in prime rental costs—tops the list for most expensive rent in the overall market, with an average weekly rent of £460 (US$648), according to the report.
New York City ranked second for the overall rental market, while Los Angeles, which didn’t feature in the top 10 for prime rentals, came in third.
"Our analysis tells us, perhaps counter-intuitively, that the cities that are most expensive to buy in are not necessarily the most expensive to rent in," said Yolande Barnes, Savills head of world research, in the analysis. "Hong Kong mainstream house prices are now around £1,070 (US$1,508) per square foot, almost double the San Francisco average, but its mainstream rents are some 30% cheaper."