BrazilHong Kong back on top as most expensive city in Mercer 2018 index
Hong Kong has reclaimed its unwelcome title as the world’s most expensive city for expats in Mercer’s latest global cost of living survey, with a host of Asian cities dominating the pointy end of the annual index.
After losing its title to Luanda in Angola last year, Hong Kong has once again been ranked as the most expensive city in the world for expats according to Mercer’s annual global cost of living survey, with the city reclaiming its position at the head of the table from 2016. Another seven Asian cities featured among the top 15, with Tokyo, Singapore and Seoul all in the top five.
While Asian cities have long featured among the most expensive, there is an increasing concentration at the top of the list, driven in part by rising costs in mainland China. All of Shanghai, Beijing, Shenzhen and Guangzhou are now crowded in the top 15 biggest burdens on the hip-pocket for expatriate employees, with a further five Chinese cities in the top 40 worldwide. One decade ago there were just two – Beijing and Shanghai – with neither inside of the top 20.
Yet, with the survey pegged to the US dollar, and adopting New York as a baseline, international currency fluctuations can have a high degree of impact on the annual index – an index designed to aid private and public agencies determine appropriate remuneration packages to attract international employees; in a technologically advanced and globally connected workforce, a ‘key component of a multinational’s business strategy’, according to Ilya Bonic, President of Mercer’s Career practice.
“Stronger Chinese monetary regulation, a flourishing economy and a push to have the Chinese Yuan as an international currency pushed Chinese cities up in the ranking,” said Yvonne Traber, Mercer’s Global Mobility Product Solutions Leader, adding that it wasn’t all budgetary gloom for expats based in Asia. “However, significant surges in other locations worldwide caused Japanese cities, Osaka [23rd] and Nagoya [41st] in particular, to fall in this year’s ranking.”
Meanwhile, Hong Kong’s rebound to the top of the list, from second last year, was on the back of soaring rental costs – along with currency movements, the most decisive factor among the 200-plus lifestyle items measured by the Mercer survey (with the city fairing reasonably well compared to its global counterparts for the cost of a happy meal) – and the comparative currency-deflated drop in rentals for expats in Luanda. As a comparison, a two-bedroom flat of international standard currently goes for roughly $7,670 p/m in Hong Kong against $5,700 in New York City.
Peter Chan, a Principal and talent consultant with Mercer in Hong Kong, says that the high cost of living in the city doesn’t however necessarily discourage expats from coming. “The cost of living is only one of the many factors that global talents consider when they decide working location. They also look at how safe the city is, quality of living and career opportunities.” In Mercer’s other comprehensive global survey – the quality of living index – Hong Kong ranked 71st globally, but was the second non-Japanese Asian city on the list following Singapore.
On the other side of the ledger, the city of Tashkent in Uzbekistan was deemed the least expensive for expats among the 400 or so locations measured, with Bishkek in Kyrgyzstan and Pakistan’s Karachi not far behind – all featuring in the bottom five of international wallet-drains, with Tashkent in at 209th as the most affordable expat centre on the planet ( a decent standard of accommodation in the central Asian city is pegged at about $270 per month). Tashkent, however, also currently ranks unfortunately down in at 203rd on Mercer’s quality of living index.
