Housing Update

Snapshots of expatriate-quality rental markets around the world

= Rents Dropping
= Rents Rising
Rents Rising

Nicosia, Cyprus

Rents have risen in Nicosia in the past year. While the three years preceding 2016 were marked by low demand during a recession, Cyprus has now begun to recover. Banks are still not loaning money for home purchases, so most people are renting. Houses are not being built as investments, so supply is not increasing. Availability is particularly tight for one- and two-bedroom apartments, and in general there is low availability across the city and even in the suburbs.

Rents Rising

Dublin, Ireland

Rents in Dublin continue to rise amid high demand and an inadequate supply. Availability of smaller one- to two-bedroom apartments is particularly tight, and any given vacant apartment may have as many as twenty applicants. The vacancy rate is around 1% for apartments and slightly higher for houses. New construction in the west suburbs and increasing interest in the north coast may alleviate some of the excess demand, but no significant construction is planned for the city center that will change the dynamics there. Expect rents to continue rising in the next year.

Rents Dropping

Almaty, Kazakhstan

Rents in Almaty are now surveyed in the local currency, KZT. Asking rents are down in KZT and USD for six and 12 months. The KZT has devalued due to a drop in gas and oil prices, a major source of income for Kazakhstan’s economy. Many companies are taking more conservative approaches to their business models and hiring more locals, so fewer expatriates are arriving. There is more supply than demand for high quality properties, and tenants have many good and affordable options to choose from. The vacancy rate has increased from 20 to 30%.

Rents Dropping

Aberdeen, U.K.

Aberdeen’s housing market is dependent on the oil and gas industry and has continued to decline in the past six months. Many expatriates have left the city, and not many new assignees are arriving. The price of oil and the uncertainty following the Brexit vote in June have forced many oil and gas companies to hold off on sending more expatriates to Aberdeen.

Rents Dropping

Bangalore, India

The expatriate rental market in Bangalore is experiencing a downturn. Rents for both apartments and houses were relatively stable over the past twelve months, but they’ve decreased in the past six months. With fewer assignees moving to Bangalore and the supply of new apartments and houses continuing to increase, supply is higher than demand. Rents on the east side of the city are the most affected, mainly because many multinational companies are moving their headquarters from the east side to north of the city, where rents have therefore remained fairly stable. The current vacancy rate in Bangalore is at 10-20%. While there are plenty of properties available for rent, houses are slightly more difficult to find than apartments, since most recent development has consisted of apartments.

Rents Dropping

Erbil, Iraq

Diminished demand from the oil and gas sector and the ongoing presence of ISIS in nearby Mosul have triggered a decrease in rental prices in Erbil. Erbil was a thriving “boom town” as recently as 2013, with massive infrastructure projects planned and hopes for making the city a new Dubai. At that time there was a continual flow of arriving and departing expatriates, creating a high demand for housing, shopping centers, and other amenities. Currently, construction projects such as the Kempinski and Marriott Hotels have stalled, and there are hardly any new expatriate arrivals into the city. Rental prices at the top apartment and villa compounds, such as MRF Towers, Dream City, and Royal City, have all decreased. Meanwhile, several new centrally located apartment complexes are expected to be finished in 2017.

Survey Location Update

AIRINC surveys more than one hundred fifty locations each quarter. Here are some selections.

Q4 Surveyed Locations

Selected cities in Europe, Asia, and
mainland Southeast Asia

Berlin, Germany
Athens, Greece
Budapest, Hungary
Tel Aviv, Israel
Milan, Italy
Almaty, Kazakhstan
Warsaw, Poland
Bern, Switzerland
Aberdeen, UK
Kiev, Ukraine
Shenzhen, China
Chennai, India
Seoul, South Korea
Pattaya, Thailand
Ho Chi Minh City, Vietnam

In response to market volatility, we also conducted survey updates in Buenos Aires, Caracas, and Lagos in the fourth quarter.

Q1 Upcoming Surveys

Selected cities in North America, Central and South America, the Middle East, Africa, and maritime Southeast Asia-Pacific

St. John’s, Antigua
Hamilton, Bermuda
Santiago, Chile
Quito, Ecuador
Port of Spain, Trinidad and Tobago
Montevideo, Uruguay
Algiers, Algeria
Libreville, Gabon
Lagos, Nigeria
Dakar, Senegal
Cape Town, South Africa
Dubai, United Arab Emirates
Melbourne, Australia
Manila, Philippines
Toronto ON, Canada

Goods And Services Update

Highlights from our in-depth on-site surveys

Indian Currency Demonetization

On November 8, 2016, Prime Minister of India Narendra Modi announced that effective the next day, 500 and 1000 rupee notes would be withdrawn from circulation. It was also announced that people in possession of these denominations had fifty days to unconditionally exchange the notes. At the time of demonetization, an AIRINC surveyor observed thousands of Indian nationals, tourists, and expatriates in long lines waiting to exchange voided bills, limited to 4000 Rs per day.

The 500 and 1000 rupee notes represented over 80% of the nation’s currency, and India is one of the most cash-dependent countries in the world–most estimates place cash transactions in India at around 90%. About 80% of the 500 and 1000 rupee notes have been returned to banks, but insufficient supplies of lower denomination bills as well as of Modi’s new 500 and 2000 rupee notes have created an unprecedented cash shortage.

The move to demonetize is an important step in preventing corruption, counterfeiting, tax evasion, and terror financing. It came one month after an amnesty period for Indians that allowed them to declare hidden income and assets. After the fifty day free exchange period, paper work must be completed in order to exchange bills. While our survey was too early to determine the effects, AIRINC will continue to monitor the long term impact of demonetization and cash shortages on the cost of goods and real estate, as well as the rollout of the Goods and Services Tax (GST) in 2017. Learn more in the following AIRShare blog post: The 122nd Amendment and GST: Big Changes in India.

Nigeria Naira Exchange Rate Options

Due to pressures on external reserves and a foreign exchange supply crisis driven mostly by low oil prices, the Central Bank of Nigeria abandoned its fixed rate policy on June 20, 2016. The old policy, which had pegged the naira to the dollar, was dropped in favor of a flexible and multiple market model, implying a floating exchange rate regime. The announcement triggered a significant devaluation of the official rate, from 199 NGN to 1 USD in June just before the change to approximately 305 NGN to 1 USD today. This rate is primarily meant to serve businesses.

Nigeria also has a very active parallel market, not to be confused with a black market. A parallel market trades foreign currencies and runs at the same time as a country’s official currency market. The parallel market in Nigeria came into existence in 1982 when there was an increasing demand for foreign currency at a time when supply was shrinking. While it has been illegal at times in the past, it is a legal practice today and is overseen by the central government of Nigeria. Bureau de Change Operators are given a special license by the government and special places where they can operate to buy and sell foreign currency at rates that differ from the Central Bank of Nigeria exchange rates. The parallel market rates are mostly cash-based and serve the retail end of the market for buyers and sellers of foreign exchange who do not wish to transact through banks. Today’s parallel market rate is approximately 480 NGN to 1 USD.

There is also an illegal black market in operation in Nigeria, consisting of sellers willing to sell currency above the government-controlled parallel market exchange rate. However, the government has been cracking down with the threat of jail time, making exchanges on the black market riskier for both buyers and sellers.

During our special November 2016 on-site survey of Lagos, we observed that all elements of business across the country are being influenced by these multiple rates, and businesspeople are constantly thinking in terms of USD to NGN exchange rates that change wildly every day. During our surveys in Lagos, the parallel market rate went as high as 470 NGN to the dollar and then as low as 390 NGN to the dollar the day after the U.S. presidential election.

Select 3-Month Exchange Rate fluctuations of more than 6%

Country Currency Change vs EUR Change vs USD
Syria SYP -56.20% -58.40%
Egypt EGP -47.50% -50.30%
South Sudan SSP -35.30% -38.70%
Democratic Republic of Congo CDF -12.40% -17.00%
Turkey TRY -9.50% -14.20%
Georgia GEL -5.90% -10.90%
Japan JPY -5.70% -10.60%
Mongolia MNT -4.60% -9.30%
Madagascar MGA -3.10% -8.20%
Myanmar MMK -3.10% -8.10%
Poland PLN -2.70% -7.70%
Ghana GHS -2.50% -7.40%
Malaysia MYR -2.30% -7.40%
Sweden SEK -2.30% -7.30%
Hungary HUF -1.60% -6.80%
Iran IRR -1.50% -6.50%
Mexico MXN -1.40% -6.60%
Romania RON -1.30% -6.40%
Azerbaijan AZN -1.00% -6.10%
Euro EUR 0.00% -5.20%
United States USD 5.60% 0.00%
Tanzania TZS 6.10% 0.50%
Papua New Guinea PGK 6.10% 0.60%
Ukraine UAH 6.50% 1.20%
Uruguay UYU 6.90% 1.00%
Kazakhstan KZT 7.00% 1.50%
Zambia ZMW 7.30% 1.70%
Chile CLP 7.70% 2.10%
Mozambique MZN 8.40% 2.90%
Eritrea ERN 8.50% 2.80%
Suriname SRD 8.80% 3.20%
Iceland ISK 8.80% 3.00%
Russia RUB 9.30% 3.70%
South Africa ZAR 9.40% 3.70%
Nigeria NGN 9.60% 3.60%
Gambia GMD 10.20% 4.40%

Selected surveyed locations with inflation higher than 5% for 6 months

Buenos Aires, Argentina
Caracas, Venezuela
Lagos, Nigeria

Country Tax Update

Changes in expatriate tax

Costa Rica

(Tax year began October 1, 2016)

Adjustments have been applied to the tax rate schedule and personal tax credits for the 2016/2017 tax year. The contribution rate to social security has decreased from 9.34% to 9.17%. The net effect is a decrease in income tax and social security for all taxpayers.


(Effective November 1, 2016)

In November 2016 the government announced an increase in the monthly minimum salary, from VEF 22,576.73 to VEF 27,092.10. This value is used to calculate the maximum contributions to the pension and unemployment social security schemes. The net effect of these changes is an increase in social security and a reduction in income taxes for most taxpayers.

Expat Tax Summaries

International Tax for Expats

What do you need to know?

Understanding international taxation is complicated, expensive, and time-consuming. You need a concise, expat-focused tool to assist your staff.

AIRINC Publications