Hong Kong has ended its four-year reign as the world’s most expensive city for expats – overtaken by New York, which has taken the top spot, according to a new survey.
ECA International’s latest ‘Cost of Living’ research ranked 207 cities based on a basket of everyday goods and services commonly purchased by shoppers.
This includes food, utilities, public transport and basic needs such as household goods. The aim of the research is to help organizations calculate cost-of-living allowances for acquirers, the data company said.
Nevertheless, Hong Kong maintained its position as the most expensive location in Asia.
“The cost of goods and services in Hong Kong rose to multi-year highs, showing that the city has not been spared the wave of inflation we’ve seen around the world in the past year,” said Lee Quane, regional director for Asia at ECA. International.
“Despite this, Hong Kong fell in our ranking as the rise in prices of goods and services was tempered by a fall in the city’s accommodation costs.”
Hong Kong raised mortgage interest rates to keep pace with the US Federal Reserve – and home prices plummeted in October at a five-year low as borrowing costs rise. The report is based on information collected in March from 207 cities in 120 countries, the ECA said. Reports suggest that Hong Kong residents left the city in droves last year — due to Covid-19 restrictions and what they see as an erosion of democratic norms.
The second most expensive location in Asia is Singapore, which moved up eight places compared to last year’s ranking.
The survey showed that Singapore is also the fifth most expensive location in the world, breaking into the top five for the first time.
According to the ECA, this rise was mainly due to “rapidly rising accommodation costs”.
A recent report from the Urban Land Institute (ULI) Asia Pacific Center for Housing found that private rental housing in Singapore had the highest monthly rent in Asia Pacific to $2,600 — “far exceeding” other cities.
The earlier easing of Covid-19 restrictions in Singapore increased demand for rental accommodation, which “did not match” the increase in supply, Quane said.
However, Singapore is one of the few locations in Asia to move up the rankings this year.
Almost all of the Asian locations surveyed fell in the rankings, the report said, citing “lower inflation rates compared to other regions surveyed.”
“[This] showed that foreigners find housing in Asian cities relatively cheaper than in the rest of the world last year,” the report said.
The most expensive places for expats in Asia
- Hong Kong
For example, Chinese cities such as Shanghai and Guangzhou have dropped out of the global top 10 and now rank as the 13th and 14th most expensive cities in the world.
“China’s relatively late transition from Covid-19 restrictions it had an impact on its economy,” Quane explained.
“The yuan is weaker against the US dollar than last year, resulting in lower costs in its cities.”
Similarly, currency depreciation “evening out” the rate of inflation in Japanese cities – Tokyo, which has been the world’s top for the past five years, has fallen five places to 10th place, the ECA said.
“Tokyo’s drop in our rankings makes it a relatively cheaper location compared to recent years,” Quane explained.
“However, for companies moving employees from Japan… [it] This means companies may have to pay more to ensure their employees’ purchasing power is protected when they are overseas.”
In the US, the rankings of all cities have risen sharply this year due to strength American dollar and “significant increases” in rental costs, the report said.
According to the survey, New York moved up one place to first place, while San Francisco moved up four places from 11th to 7th.