Hong Kong most expensive rental market in world: Report

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Slowdown in the US economy leading to dollar's plunge has made foreign markets like Hong Kong, Moscow and Tokyo pricey.

"In Hong Kong...in dollar-adjusted terms, a two-bedroom, unfurnished apartment runs $6,398 a month. By comparison, $4,000 a month for Moscow and $4,102 for Tokyo look cheap," says author Matt Woolsey.

Forbes' findings are based on data taken from Mercer Human Resource Consulting, which based its numbers on 2007 data for rental properties in the 'Class-A market.'

"Though it means different things in different places, a Class-A designation roughly equates to a unit in high-end, unfurnished building in a good part of town. The measures are taken at the median level, so as to exclude the ridiculous costs of premium apartments in neighborhoods like London's Belgravia or on Central Park in New York," Woolsey says.

Rents were adjusted from local currencies to dollars, the author said, even as the dollar struck record low against the euro and the British pound in 2007.

According to Woolsey, American companies with offices in other countries are likely to be hard hit as even subtle increase in local rental rates combined with depreciation in dollar may result in huge jumps in overall prices.

For instance, adjusted against the dollar, London witnessed a 30 percent jump in rent from 2006 to 2007. However, this is nothing, considering the 33 percent jump in Moscow, Russia and a whopping 87 percent jump in Bangalore, India.

And, "given that Americans can't seem to afford 3-6 percent increases in mortgage payments," says Woolsey, the jump is steep indeed.

"Large, multinational companies feel the pinch less than small businesses, for whom anywhere from a few hundred to a thousand a month is a lot to fret over," the author notes, adding that since 2006, monthly rents in Hong Kong, as measured by Mercer, grew from $4,898 to $6,398, while in Moscow, they rose $1,000, and in London they jumped about $900.

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