by BLOOMBERG/ pic by BLOOMBERG
Hong Kong has been named the world’s most expensive city for expatriates for the second year running, according to an annual report by consulting firm Mercer.
Eight of the top 10 cities named in the Cost of Living survey are in Asia, up from six entries in 2018. Hong Kong’s red-hot housing market and fluctuations in its currency – which is pegged to the strong U.S. dollar – kept the city at the top of the list. Tokyo came in second, followed by Singapore, Seoul, Zurich and Shanghai.
“The underlying reason for Hong Kong’s top ranking is that there is still strong demand for accommodation suitable for expatriates to a standard they expect and in locations popular with expatriate communities,” said Mario Ferraro, Mercer’s Global Mobility Practice Leader for Asia, Middle East and Africa.
The biggest climber on the list is Ashgabat, Turkmenistan’s capital. The city leapt 36 spots to seventh place as a result of a shortage of currency and imported goods driving up prices, according to the study.
Several cities in the United States climbed in the rankings due to the dollar’s strength. New York jumped four places to break into the top 10, while San Francisco and Los Angeles took 16th and 18th place respectively. Many European cities dropped down the rankings as local currencies weakened against the dollar, not helped by concerns over economic outlook, the escalating trade war and Brexit unease. London slipped four spots to take 23rd place, Paris came in 47th, and the German cities Berlin, Dusseldorf and Stuttgart all fell significantly.
The ranking looks at 209 cities around the world, measuring the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It’s aimed at helping multinational companies and governments determine compensation packages for the skilled foreign workers they send or hire overseas. New York City is used as the base for all comparisons, and currency movements are measured against the US dollar.
Ferraro said that as Asia continued to attract foreign investment, expats were driving demand for high quality goods, services and accommodation.
“Despite the relatively high cost of living, many organisations still see a strong business rationale for moving talent into and within the region. At the same time, we are seeing an increased focus on having a clear business case for the assignment, as well as measuring the return on investment,” he said.
Elsewhere, Australian cities tumbled down the rankings, due to depreciation of the local currency against the U.S. dollar, with Sydney the country’s most expensive place for expats at number 50. Mumbai was India’s costliest city, coming in at number 67, while New Delhi was in 118th position.
The least expensive city for expats is Tunis in Tunisia, with Uzbekistan’s capital Tashkent and Karachi in Pakistan in the preceding slots, according to the survey.