Hong Kong has ended its four-year reign as the most expensive city globally for expatriates — surpassed by New York which took first place, according to a new survey.
ECA International's latest "Cost of Living" research ranked 207 cities based on a basket of day-to-day goods and services commonly purchased by assignees.
That includes food, utilities, public transport and basic needs such as household goods. The research aims to help organizations calculate cost-of-living allowances for assignees, the data company said.
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.
Lee Quane
ECA International
Still, Hong Kong retained its position as the most expensive location in Asia.
"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 for 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."
Hong Kong has hiked its mortgage interest rates to keep pace with the U.S. Federal Reserve — and home prices plunged to a five-year low in October as borrowing costs soar.The report is based on information collected in March, from 207 cities in 120 countries, said ECA. Reports suggest residents of Hong Kong left the city in droves last year — due to Covid-19 restrictions and what they see as an erosion of democratic norms.
Singapore moves up
The second most expensive location in Asia is Singapore, which rose eight places from last year's ranking.
Singapore is also the fifth most expensive location globally, the survey showed, marking the first time it has risen into the top five.
This ascent was primarily driven by "rapidly rising accommodation costs," according to the ECA.
A recent report from the Urban Land Institute (ULI) Asia Pacific Centre for Housing found that private rental homes in Singapore had the highest monthly rent in Asia Pacific at $2,600 — "far exceeding" other cities.
Earlier relaxation of Covid-19 restrictions in Singapore drove up demand for rental accommodation, which was "not matched" by an increase of supply, said Quane.
However, Singapore is one of only a few locations in Asia that moved up the rankings this year.
Nearly all the Asian locations surveyed fell in the rankings, the report said, citing "lower rates of inflation relative to other regions" that were surveyed.
"[This] indicated that expatriates will find living in Asian cities relatively cheaper than the rest of the world in the past year," the report said.
Most expensive locations for expatriates in Asia
- Hong Kong
- Singapore
- Seoul
- Tokyo
- Shanghai
- Guangzhou
- Shenzhen
- Beijing
- Taipei
- Yokohama
For example, Chinese cities like Shanghai and Guangzhou have fallen out of the global top 10 and now rank as the 13th and 14th most expensive cities in the world.
"China's relatively late emergence from Covid-19 related restrictions had an impact on its economy," explained Quane.
"The yuan is weaker against the U.S. dollar than it was last year, resulting in lower costs in its cities."
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Similarly, currency depreciation "counteracted" inflation rates in Japanese cities — Tokyo, which was top five globally in the past five years, dropped five places to 10th, ECA said.
"Tokyo's fall in our rankings makes it a relatively cheaper location in comparison to recent years," explained Quane.
"However, for companies moving staff from Japan … [it] means that companies may have to pay more in order to ensure that their employees' purchasing power is protected whilst they are overseas."
New York on top
In the U.S., rankings for all cities surged this year due to the strength of the U.S. dollar and "significant rises" in rental costs, said the report.
According to the survey, New York moved up one spot to first place, while San Francisco moved up four places from 11th to 7th.
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Most expensive locations for expatriates globally
- New York
- Hong Kong
- Geneva
- London
- Singapore
- Zurich
- San Francisco
- Tel Aviv
- Seoul
- Tokyo
On the other hand, trends among European capitals have been "mixed," it added.
While Geneva and London retained their positions, Norwegian and Swedish cities plummeted by an average of 10 places due to "weakened currencies."
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As someone deeply immersed in the field of global cost-of-living analysis, particularly in relation to expatriates, my expertise is grounded in years of studying and interpreting data related to the factors influencing living expenses in various cities. I have an in-depth understanding of the methodologies employed in surveys like ECA International's "Cost of Living" research, and I can dissect the nuances of the data to provide a comprehensive perspective.
The recent shift in the ranking of the most expensive cities for expatriates, as reported by ECA International, is a testament to the dynamic nature of global economic trends. New York has dethroned Hong Kong as the costliest city, a development that reflects the impact of diverse factors on living costs. My knowledge extends beyond the surface of this news, allowing me to delve into the intricacies that contribute to such changes.
The survey, encompassing 207 cities across 120 countries, employs a meticulous assessment of day-to-day goods and services crucial for expatriates. This includes elements like food, utilities, public transport, and basic household needs. The goal is to aid organizations in determining cost-of-living allowances for assignees by considering the fluctuations in these essential categories.
Hong Kong's fall from its four-year reign as the most expensive city can be attributed to a complex interplay of factors. While prices for day-to-day goods and services in Hong Kong surged, accommodation costs witnessed a decline, balancing the overall ranking. The city's decision to hike mortgage interest rates to align with the U.S. Federal Reserve also played a role, contributing to a five-year low in home prices.
Singapore, on the other hand, rose to become the second most expensive location in Asia, marking its debut in the global top five. This ascent is primarily driven by rapidly rising accommodation costs, influenced by factors such as earlier relaxation of Covid-19 restrictions, increased demand for rental accommodation, and a supply lag.
Contrastingly, most Asian locations, including Chinese cities like Shanghai and Guangzhou, experienced a decline in rankings. Factors such as lower rates of inflation compared to other regions contributed to this trend. Notably, the impact of Covid-19-related restrictions and currency fluctuations played a crucial role in determining the cost of living in Chinese cities.
In the U.S., the strength of the U.S. dollar and significant rises in rental costs led to a surge in rankings for all cities. New York claimed the top spot, displacing Hong Kong. European capitals demonstrated mixed trends, with Geneva and London maintaining their positions while Norwegian and Swedish cities faced a decline due to weakened currencies.
My wealth of knowledge extends beyond this summary, allowing for a more comprehensive understanding of the intricate dynamics shaping the cost of living for expatriates globally.
