High rents and scarce real estate is hurting the attractivenes of Mumbai and New Delhi among people who want to move into the country from abroad. A study by Mercer on housing costs and practices for employees sent on overseas assignments shows Mumbai and New Delhi are among the world?s top 10 costliest cities for expatriates to relocate.
Asian cities, thanks to their high cost of infrastructure including real estate, dominate the list. New York, Geneva and London are locations outside Asia that form part of the list; Moscow is the costliest location for expatriate rental property, the study had found.
?Housing remains one of the most sensitive issues in the expatriate package negotiation process. This is not only because it is costly, but also because of the significant impact it has on the assignee and the family,? said Gangapriya Chakraverti, India business leader, Mercer?s information product solutions business. ?In the last few months, we have noticed a considerable change in the housing choices of companies and multinationals, evidently resulting from the global slowdown?, said Chakraverti.
In fact, because of the slowdown, some of the destinations in Asia have come down the rankings. Tokyo is the second most expensive rental city for expatriates globally-up from third place in 2008, due to an appreciation of around 17% in the value of the yen against the dollar since September 2008.
As per the report, the current slowdown has led companies to a fundamental shift in the types of housing being offered in India. Earlier, multinationals would provide expat employees with luxurious housing options such as large farmhouses featuring world-class facilities. However, now, an increasing number of companies are opting for luxury condominiums that are equipped with the same kind of facilities, but come at a lower price.
As a result, expats are increasingly located in Gurgaon, Whitefield in Bangalore and Powai in Mumbai, as opposed to more traditional locations such as Chanakyapuri, Indiranagar and Colaba. Giving a user perspective, Dr CS Venkata Ratnam, director at the Internatational Management Institute, New Delhi, said a professor from Finland the institute planned to bring on a sabbatical could not make it due to unavailability of suitable accommodation.
?He was trying to get an apartment in South Delhi and was even planning to shell out up to Rs 2 lakh a month. Despite this, he was unable to find any place that fit his budget, as all options he was getting were way beyond his budget,? said Ratnam.