BrazilAsian cities rank as most expensive in global Mercer survey
Global business hubs in Asia have again dominated Mercer’s annual cost-of-living survey of ‘most expensive for expats’ list, with five cities across the region ranking among the top ten.
Covering more than 400 cities over five continents, Mercer bills its cost-of-living survey as “one of the world’s most comprehensive”, measuring the comparative prices of 209 items across categories including housing, transportation, apparel, household goods, and, perhaps most importantly for those expats deprived of some home comforts, the cost of a hamburger and fries.
Hong Kong led the assault against the hip-pocket this year to land second place worldwide (knocked from its former top perch by a sharp rise in the cost of goods and security in Luanda, Angola) with Tokyo (3rd), Singapore (5th), Seoul (6th) and Shanghai (8th) following closely in pursuit. In fact, Asia was only spared a near clean-sweep of the top-ten this year by a resurgent and notoriously pricey Switzerland, with Zurich, Geneva and Bern together bumping Beijing and Shenzhen into 11th and 12th.
The survey, now in its 23rd edition, adopts New York as a base-line, and converts all local currencies to U.S. dollars for the purpose of comparison. As such, fluctuations in local currencies against the USD$ can account for most of this year’s movements in Asia. Hong Kong, for example, with its currency pegged to the strengthening USD$, has suffered a rise in accommodation prices relative to other locations.
Similarly, a strong Japanese yen combined with the high cost of expatriate consumer goods and a robust local housing market have seen Tokyo push up to third on the list from fifth last year, while a number of other Japanese cities have also climbed the rankings, including Osaka in 20th place. On the flip-side, a weakening Chinese yuan against the U.S. Dollar has seen the majority of the nation’s big cities fall in the rankings, although the country can still lay claim to nine slots within the top fifty, with Shanghai leading the way in eighth and only down the single spot from last year.
Growing Economies
Speaking on the report, however, Mario Ferraro, Mercer’s global mobility leader for Asia, Middle East and Africa, notes that, "Although this year’s movements were due mainly to currency fluctuations, particularly against the U.S. dollar, we did see cities – such as Mumbai – move up the ranks due to their strengthening economy and growing opportunities.”
Indeed, Mumbai, India’s financial capital, was this year’s big bolter, moving up twenty-five spots to peak at 57th, with its rapid economic growth bolstered by a stable rupee and the inflation of goods and services costs considered chiefly responsible, while New Delhi (99th) and Chennai (135th) followed suit with a thirty-one and twenty-three place rise respectively.
South-East Asia also witnessed moderate upswings, with Bangkok and Jakarta slotting in at 67th and 88th, up a respective seven and five spots, and Hanoi cracking the top-100 with a six-place jump. On the other end of the scale, the greater Asian region also had a decent showing, represented by both Karachi (201st) and Bishek (208th) in the bottom five most expensive cities surveyed, with Kyrgystan just edged out of the low-cost crown by Tunis in last place.
As for the finer details of the report, it’s reasonably good news for fast-food junkies in Tokyo. Despite being declared the third most expensive city on the planet, a hamburger combo will only set back the hungry expat a moderate $5.93, as compared to an extortionate sum of $8.70 in New York and the $7.97 price-gouge of Sydney.
Some limp fries and a stale burger aside, the human resources consulting firm’s cost-of-living index is expressly designed to aid multinationals and local governments in determining appropriate remuneration packages to attract and retain international employees. “While historically mobility, talent management, and rewards have been managed independently of one another, organisations are now using a more holistic approach to enhance their mobility strategies,” Ilya Bonic, Senior Partner and President of Mercer’s Career business, said, “Compensation is important to be competitive and must be determined appropriately based on the cost of living, currency, and location.”
Such concerns will become increasingly prevalent as the Asian economy continues its boom and growing talent management issues occur as a result. A recent survey of APAC business leaders by Grant Thornton highlighted the rising optimism among CEO’s of the region, yet noted that an ageing population might lead to a shortage in labour supply, while a similar finding of optimism by Big Four firm PwC noted that securing talent was the now the primary area of concern for respondents.
As for this year’s Mercer report and the ongoing predominance of Asian cities, Ferraro added that, although they remain among the world’s most expensive, "key financial hubs such as Hong Kong and Singapore still continue to attract talent and remain a top choice for relocation for employees, mainly due to their high quality of living standards, their cosmopolitan environment and the number of international organisations with regional or global headquarters there.”
