Hong Kong falls one place to become the second-most expensive location in the world (2024)

• Hong Kong loses number one status in spite of high levels of inflation
• Singapore climbs eight places to become the fifth-most expensive location in the world
• New York claims top spot due to high rental and price inflation

Hong Kong, 7 June 2023 – Hong Kong dropped one place and is now the second-most expensive location in the world, having been surpassed by New York. Despite historically high rates of inflation, Hong Kong still fell in the rankings as prices rose at a faster rate in New York and accommodation costs continued to fall in Hong Kong in 2022. This shift marks the end of Hong Kong's four-year reign at the top and was one of the findings of the latest cost of living research published by ECA International, the world's leading provider of knowledge, information and software for the management and assignment of employees around the world.

“Costs for goods and services in Hong Kong rose at multi-year highs, showing that the city was not spared from the wave of inflation we have seen throughout the world in the past year,” said Lee Quane, Regional Director – Asia at ECA International. “In spite of this, Hong Kong fell in our rankings as the increase in prices of day-to-day goods and services was tempered by falls in accommodation costs in the city.”

ECA International has been conducting research into cost of living for 50 years. It carries out two main surveys per year to help companies assess cost of living differences as part of salary calculations for cross-border moves. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 500 locations worldwide. ECA’s accommodation data is also factored in, comparing rental costs in areas typically inhabited by expatriate staff in over 430 locations worldwide.

Asia highlights

Hong Kong’s fall in the rankings was matched by nearly all major locations in the region. Singapore, Seoul and Yangon were among the exceptions, with Singapore rising eight places to claim fifth spot and Seoul climbing one place to secure ninth position. The rise in rankings in these two locations was primarily driven by rapidly rising accommodation costs, albeit for different reasons. Rents in Singapore rose significantly in 2022 as supply did not keep pace with rises in demand. On the other hand, housing costs in Seoul rose largely due to a reduction in supply arising from changes in property tax regulations in the city.

“The fall of many Asian locations in our rankings is partly due to lower rates of inflation relative to other regions included in our research,” advised Quane. “However, some locations bucked this trend. Singapore and Seoul’s rise was due largely to major increases in accommodation costs whereas Yangon’s rise was due to ongoing socio-political issues causing significant inflation for day-to-day goods and services.”

Chinese cities fell in the rankings due to the impact of a weaker Chinese yuan and lower rates of inflation compared to other countries. Shanghai and Guangzhou, while retaining their status as the most expensive cities in China, have fallen out of the global top 10 and now rank as the 13^th and 14^th most expensive cities in the world.

“China’s relatively late emergence from Covid-19 related restrictions had an impact on its economy,” explained Quane. “Its currency is weaker against the US dollar than it was last year making its cities relatively cheaper while inflation rates have been lower than in many other locations in the world.”

Cities in Taiwan have also seen double-digit drops in rankings, with Taipei sliding 11 places to 31^st spot globally. Similarly, Japanese cities also witnessed significant falls in the rankings as currency depreciation counteracted inflation rates that are at multi-year highs. Tokyo, which was consistently among the top five globally in the past five years, has dropped five places to 10^th.

“Tokyo’s fall in our rankings relatively makes it a cheaper location in comparison to recent years,” explained Quane. “However, for companies moving staff from Japan, the result of Japanese cities’ fall in our rankings owing to a weaker currency means that companies may have to pay more in order to ensure that their employees’ purchasing power is protected whilst they are overseas.”

Top Ten Most Expensive Locations for Expatriates - Asia

Global highlights

Rankings for all US cities have risen this year, driven by the strength of the US dollar and high inflation. New York has overtaken Hong Kong as the most expensive location in the world for expatriates thanks, in particular, to significant rises in rental costs as demand soared post pandemic.

Meanwhile, trends among European capitals have been mixed. Geneva and London maintained their positions as the third and fourth most expensive locations in the world. Norwegian and Swedish cities plummeted in the rankings by an average of 10 places as their currencies weakened while nearly two-thirds of the locations in the Eurozone have risen in the rankings. France is one of the exceptions as all surveyed French cities have fallen in the rankings as they have seen marginally lower inflation than many other cities using the euro.

The ongoing Russian invasion of Ukraine continues to impact the cost of living in the warring countries themselves, the wider region and around the world. Despite Western sanctions, the Russian rouble has rebounded in the past year, pushing Moscow up 37 places to become the 25^thmost expensive location in the world.

Accommodation costs in locations where many Ukrainian refugees have fled the war have surged making them more expensive for everyone including expatriates. Polish cities have seen the biggest impact with massive rises in rents of between 25% and 50% which has pushed Krakow up 23 places in the global rankings to 178^th and Warsaw up 11 places to 158^th. Russians fleeing possible mobilisation as a result of the war have also had an impact on several cities, such as Dubai, Yerevan, Nicosia and Tbilisi among others. Rents in Dubai rose nearly a third, pushing the city up to 12^th in the global rankings, while rents also rose by more than a fifth in Tbilisi as supply could not rise to meet the increased demand from Russian expatriates. The Georgian city rose 65 places to 102^nd in the rankings as a stronger currency also helped make it more expensive for visitors. However, Istanbul is the biggest riser in this year’s rankings, up 95 places to 108^th. While the city has been impacted by the war, prices have surged by over 80%, mainly due to the economic policies of the recently re-elected President Erdogan.

Top Ten Most Expensive Locations for Expatriates - Global