Singapore is now the 24th most expensive location in the world for expatriates, falling from 18th place last year. This was one of the findings of the latest Cost of Living survey published by ECA International, the world’s leading provider of knowledge, information and software for the management and assignment of employees around the world.
To ensure that an employee’s spending power is maintained when they are sent on international assignment, a cost of living allowance is often provided as part of the pay package. This allowance will be affected by differences in prices as well as exchange rate movements between that employee’s home and host countries.
“Prices have risen in Singapore since our last survey. Therefore, in local currency terms expatriates in Singapore will clearly have felt an increase in their cost of living in the past twelve months,” said Lee Quane, Regional Director – Asia, ECA International. “However, as the Singapore dollar has depreciated against many currencies over the course of the last year, this has made the cost of living cheaper relative to several other locations than it was a year ago.”
While Singapore and Malaysian cities have fallen in our global rankings, the gap between Singapore’s cost of living and Kuala Lumpur’s has increased over the past 12 months – with Kuala Lumpur falling by 15 places to 212th position. Both George Town and Johor Bahru have fallen by 10 places in the global rankings to 245th and 250th respectively – out of the 262 ranked locations.
“The continued weakness of the Malaysian ringgit is responsible for Kuala Lumpur’s decline in the rankings, as well as Johor Bahru’s status as the location with the second-lowest cost of living in the region,” added Quane. “Cities in Malaysia continue to rank amongst those with the lowest cost of living for international assignees in the world, and have even become marginally cheaper over the past five years.”
ECA International has been conducting research into cost of living for over 45 years. It carries out two main 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 over 460 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.
Asia Pacific highlights:
Hong Kong overtakes Tokyo for regional top spot
Hong Kong is the Asia Pacific region’s most expensive location for expatriates, up one place from second position last year. From a global perspective, it has ascended by seven places to become the second-most expensive location for expatriates – its highest ever rankings on both fronts. Since 2011, Hong Kong has risen steadily in both the regional and global rankings.
“Hong Kong has continued to get more expensive for expatriates. Over the past few years, the HK dollar has appreciated against most major currencies, owing to its peg to the US dollar, which has pushed up the price of goods and services relative to those in locations whose currencies have weakened against the greenback,” said Quane.
In Japan, Tokyo has fallen by one place to second-most expensive location in Asia. All other ranked locations in Japan maintained their positions in the regional rankings. On a global scale, there has been some movement – other than Tokyo (retaining 7th position globally), all other ranked Japanese cities have fallen by four places, with Yokohama (16th), Nagoya (17th) and Osaka (18th).
“Prices in Japan have remained stable over the past year. The yen, on the other hand, has weakened against most major currencies, contributing to the decline of Japanese cities in our rankings,” explained Quane. “This means that for many companies, the cost of maintaining their assignees’ purchasing power while posted here has fallen and international assignees based in Japan may see their cost of living allowances decrease.”
Elsewhere, Taiwanese cities have been the highest climbers in the regional rankings, with Kaohsiung rising the most in the region from 31st to 18th this year. Ulaanbaatar, Mongolia, remains the cheapest location in the region followed by cities in Malaysia and Myanmar.
“Much of the movement in the rankings amongst Asian locations in the past 12 months has been strongly influenced by currency movements, with Yangon falling in the regional rankings on account of depreciation of its currency in the past year,” added Quane.
Sydney remains the most expensive city in Australia. It currently ranks 50th in the global rankings, up from 70th place last year. All ranked locations within Australia rose in our global rankings this year, with Adelaide rising the most, by 34 places to 75th position – although it is still the cheapest ranked location in Australia.
Global highlights – Luanda tops the global rankings of most expensive cities for expatriates, Buenos Aires significantly rises & Central London falls
Luanda has risen from 8th position last year to top ECA’s global rankings this year.
“The cost of goods typically purchased by international assignees in Luanda, which were already high due to poor infrastructure and high oil-fuelled demand, have been pushed much higher in the last year. The Angolan kwanza is increasingly overvalued, which pushes up relative costs; while the continued weakness of the black-market exchange rate has also inflated the price of imported goods,” added Quane.
Buenos Aires, the Argentine capital, ranks 35th globally this year, in sharp contrast to 2016 when it was 163rd. It has risen by 128 places in the global rankings in the past year, mainly because of soaring inflation, and is the second-highest climber this survey, behind Caracas.
Central London is the 132nd-most expensive location in the world for expatriates, down 67 places from last year – falling out of the top 100 most expensive cities in the world. London is now cheaper than Bangkok, Rio de Janeiro and Buenos Aires, as well as its European rivals Paris, Berlin and Brussels, thanks to the weak pound.
Source: Media Release