Home away from home

Thinking of working overseas? Consider the biggest living expense you’ll incur – rent. By Lisa Cheong

One of the biggest concerns expatriates usually worry about before taking an assignment is, “Where am I going to live?”

According to Beverly Mayhew, founder and chairman of Orientations, housing is often the second biggest cost after the employee’s salary. However, she adds that companies often commit to keeping the employee’s standard of living similar to what the employee experienced in his or her home country – with no significant increase or decrease either way.

And navigating employee housing can be a potential landmine, Mayhew says. “While most employees are expecting differences in the type of accommodation they will take up, they are seldom expecting the associated costs.” And while some companies pay for the housing costs, others implement some form of equalization or contribution from the employee as well. Hence, Mayhew say, the phrase “the company pays” is really an inaccurate representation of the actual benefit.

So where are some of the popular living areas within the Asian cities for expatriates? Mayhew provides some figures on what “expatriate slums” (a term coined because of the high number of expats living there) can expect to pay.

China

For employees relocating to Shanghai, Hongqiao, an area west of downtown Shanghai is popular with expatriates for its close vicinity to the international schools in the area. A typical middle-manager type of accommodation for a family size of three would be a three-bedroom villa (the name for a standalone, single-family bungalow), which would cost between RMB 28,000 to 40,000 per month, not including utilities or maintenance charges.

In the Jing’an district, a high rise condominium, suitable for double-income couples with no children will run RMB 20,000 to RMB 30,000 per month, or a bit more exclusive for more senior level assignees will be the Xintiandi at RMB 30,000 to RMB 47,000.

In addition, leases are usually taken under the company tenants and deposits are usually equivalent to two-months rental.

India

While India’s housing market has not been affected by the downturn, the country does not have any “typical” living areas that expatriates would live in. In fact, Mayhew says expats would usually try to live near the office or children’s school due to the heavy traffic conditions in the country.

For a middle-manager position, a high-rise condominium in India would usually cost US$4,500 to US$7,000 for a family of three.

While demand in Bangalore is high due to the demand from technology companies, Mumbai and Delhi’s rental markets are approximately 15% less than that of Bangalore.

Company leases are also required in India. “The unique condition in India is that 12 months of the cost of the tenancy is paid up front. This is similar to the market in Jakarta, Indonesia where the entire cost of the tenancy, which can be for a period of two to three years, is paid up front,” Mayhew adds.

Vietnam

Expats living in Vietnam often do not live in condominiums. Instead, the more popular choices include standalone housing (which are similar to semi-detached homes) or service apartment complexes in a compound. Leases are taken for two years on average.

In An Phu, a District 2 neighbourhood, the average cost for a house costs US$3,000 without a pool and garden, and US$4,000 for a pool and garden. Meanwhile, the average cost of a 3-bedroom apartment can charge anywhere from US$2,500 to US$3,000.

“Interestingly, Asian expatriates prefer District 7 called Phu My Hung. This district typically has bungalows and costs in the range of US$3,000 for a 3-bedroom without pool or garden,” Mayhew adds.

While company tenancy agreements are preferred, Mayhew says Vietnam’s tenancy agreements are more negotiable compared to other Asian countries.