A survey published by knowledge, information and software company, ECA International has placed Hong Kong in the top ten of most expensive locations in the world for expatriates. The country now ranks ninth out of over 260 cities included in the rankings.
The location has risen two places on the list and is back in the top ten after dropping out in the 2016 survey. Over the past five years, Hong Kong has risen steadily up the global rankings to become one of the most expensive locations for international employees to live and work in.
“Although Hong Kong briefly dropped out of the top ten last year, it has risen in the ECA global rankings over the past five years. Hong Kong has now overtaken cities in Japan to reclaim its place in the top ten most expensive locations,” said Lee Quane, regional director – Asia, ECA International. “It now has the second highest cost of living of any city in the Asia-Pacific region, only behind Tokyo, up from fifth this time last year. Faster rates of price increases in Hong Kong combined with a strengthening of the dollar against the yen both contributed to Hong Kong leapfrogging many of the Japanese locations that were ranked above it last year.”
ECA International has been conducting research into cost of living for over 45 years. It carries out two cost of living surveys per year to help companies calculate cost of living allowances so that their employees' spending power is not compromised while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in 262 locations worldwide. Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.
The report shows how Asian cities are leading the way as the most expensive locations to live in, with over half of the top 50 most expensive locations surveyed this year being in the continent. A total of 26 of the top 50 entries were Asian cities, with 14 Chinese cities alone featured on the list. This compares with just four EU cities and three US making it into the top 50.
In Japan, Tokyo has fallen seven places and relinquished the global top spot in the process – falling to eighth in the table. Despite this, Tokyo remains the most expensive location for expatriates in the Asia Pacific region. Other Japanese cities have performed similarly - with Yokohama, Nagoya and Osaka all dropping out of the top ten.
Quane said, “Japanese cities have dropped in the rankings as the yen has weakened in the last year. However, with four cities in the global top 20 Japan is still an expensive place for expatriates.”
Taiwanese cities on the other hand continue to rise through the rankings with Taipei and Kaohsiung 33rd and 45th respectively. This is a dramatic rise when compared with five years ago when Taipei was ranked 66th most expensive location and Kaohsiung not even in the top 100.
Singapore has fallen in the rankings and is now the 21st most expensive city surveyed. This is the first time since 2014 that Singapore has not featured in the top 20.
Asia is also home to some of the cheapest locations in the ranking table, with Ulaanbaatar claiming the status as Asia’s cheapest location. “This highlights the curiosity of managing the movement of people in Asia for many companies and their HR departments,” added Quane. “Asia is home to some of the world’s most expensive locations as well its cheapest. This level of variety is only matched in Africa which is home to both the world’s most expensive location and its cheapest.”
Ulaanbaatar is joined by Johor Bahru, George Town (Penang), Yangon and Karachi in making up the cheapest locations in Asia, with all locations falling in our global rankings over the past 12 months.
Elsewhere in Asia, the newly introduced GST tax in India seems to have had little impact on the cost of living in Indian cities. All Indian locations that were surveyed have risen slightly from their positions in the 2016 survey, but the highest-placed remains New Delhi in 166th.
Quane said, “When a new tax is introduced prices do not always rise overnight. The introduction of national goods and services tax in India to replace a range of central and state taxes seems to have had little impact on the costs overall.”