The findings of a new study conducted by apartment search platform RENTCafé expand the understanding of the rental housing markets in the world’s top financial centres.
The research explores the average monthly rent for one-bedroom apartments measuring between 55 and 85 square metres (600 and 999 square feet) in the 30 most powerful financial hubs in the world.
Renting an Apartment in the Top Financial Centres of the World
Among the most potent global financial centres – as ranked in Z/Yen Group‘s Global Financial Centres Index – New York City is home to the world’s highest rents, pegged at $3,680 per month for a one-bedroom apartment home.
Given the increasing global mobility of today’s workforce, the RENTCafé study aims to put rent prices in these cities in context for professionals working in the financial and economic sectors, and provide an overview of potential alternatives to the city they currently live and work in. While most of these urban business hubs have been well-known for asking high rents, the analysis reveals just how much a renter needs to shell out on housing every month and how these cities compare to each other when it comes to apartment rents.
Surprisingly enough, London – currently the leading financial centre of the world – is one of the least expensive cities for renters seeking the benefits associated with living in a thriving business hub. The British capital’s £1,351 average rent ($1,650 in US dollars) means it is only the 20th most expensive rental housing market among the world’s top financial centres.
People flocking to South Africa’s economic hub are likely to find some of the world’s cheapest rents. An average family living in Johannesburg spends less than a quarter of their monthly income on rent, according to a survey by RentCafé, an online property listing service. That makes the city the third most affordable city in the world, according to the index.
Still, Johannesburg’s top ranking is likely to mean little for the thousands of people living in shacks around the city’s outskirts. South Africa’s income inequality is some of the highest in the world, but for those who can afford to live in the ubiquitous gated communities, townhouses and increasing number of high-rise apartment blocks, the “city of gold” has its perks.
The African city at the bottom of the scale was the continent’s largest, Lagos. There, the average family spends more than half of its monthly income on rent. Lagos’s high rents put the citizens’ rent burden on par with Los Angeles and the island of Manhattan. With limited space on the waterfront and the city’s islands, Lagos has tried to force the poor from its prime real estate, exacerbating infrastructural and social challenges.
RentCafé selected the surveyed cities from the PricewaterhouseCoopers annual Cities of Opportunity Index. The list ranks 30 cities on their ability to compete in a digital world, economic opportunity for its citizens and quality of life, which includes healthcare, transportation and environmental sustainability.
Johannesburg has become something of a permanent member of PwC’s Cities of Opportunity. Fairly young compared to other international cities, Johannesburg was founded in a frenzied gold rush in 1886 and rapidly developed from a tent camp of prospectors to a modern hub of urban living in the early 20th century.
In 1888, the city had its own lighting company; by 1891 the first telephone line rang; and the first electric tram ran in 1906. Johannesburg’s planners had more in mind than just a mining town: the city’s first theater opened just a year after it was founded, followed by a library three years later, and a symphony orchestra by 1927.
Johannesburg’s relative “youth” and continued rapid growth are typical of African cities today, according to PwC. The continent is rapidly urbanizing, at a rate of 3.65% annually, or a projected urban population of more than a billion people by 2063 compared with the present population of about 1.2 billion people (pdf) spread across rural and urban areas. Current city skylines seem woefully ill-prepared to handle this population boom, but that shouldn’t temper their potential.
“African cities need to be looked at through a different lens,” PwC said when launching its Into Africa report (pdf) in 2015. “The available data and analysis has limitations and only tells part of the story.”