If you think London rent rises are bad, try living in Guangzhou.
The Chinese port city, near Hong Kong, on Monday topped property consultancy Knight Frank’s third quarter Prime Global Rental Index, which measures luxury rent growth in cities around the world.
Luxury Guangzhou rents jumped an eye-watering 6.2% compared to the third quarter last year. That’s more than double the rise in the second fastest growing city, London, which recorded growth of 2.4% — London’s lowest growth figure since September 2014.
It’s also a big acceleration for Guangzhou, which ranked 5th with rent growth of 2.8% in the second quarter survey. Guangzhou, home to 15 million people, is China’s third largest City after Beijing and Shanghai.
Guangzhou is trying to establish itself as a world leading city on a par with its 2 biggest rivals and the city’s mayor launched the Guangzhou International Award for Urban Innovation in 2012 to try and raise its profile. The push is clearly paying off, attracting wealthy renters.
Knight Frank doesn’t think the huge price growth in top end rents to continue at the same rate though, saying:
The shift in prime rents is also influenced by changes to housing policy. In Guangzhou for example, we expect prime rents to dip slightly in the fourth quarter as interest rate cuts and the relaxation of restrictions for foreign buyers filter into the market pushing demand back towards the sales market.
In other words, as it gets easier for foreigners to buy in Guangzhou, more of them will filter away from the rental sector and into home ownership. That will ease upward pressure on rents.
Here’s the full third quarter ranking of luxury city rent growth from Knight Frank:
NOW WATCH: Jim Cramer told us about his ‘vicious’ daily routine which starts at 3:45 AM and doesn’t end until after 11:30 PM
Business Insider Emails & Alerts
Site highlights each day to your inbox.