Asian cities claim eight of top ten slots in latest cost of living index

27 June 2019 Consultancy.asia

Hong Kong has retained its title as the world’s most expensive city for expats in Mercer’s latest annual cost of living survey, with cities across Asia continuing to concentrate at the top of the list.

Global human capital consultancy Mercer has released its 25th and latest annual cost of living survey, with Asian and Central Asian cities now claiming an astounding eight of the top ten places – led once again by Hong Kong. Tokyo has likewise retained its second spot from last year, while Singapore has climbed another rung into third. Seoul, which was placed in 15th in just 2016, has this year moved ahead of Zurich to fourth.

Having been conducted for the past quarter of a century, Mercer’s comprehensive expatriate-focused survey compares the cost (with currency movements measured against the US dollar and New York used as a base) of more than 200 products, expenses and services – including housing, transportation, food, clothing, household goods, and entertainment – across 500-plus cities worldwide, arriving this year at a final ranking of 209 locations on four continents.

While a number of Asian cities have long featured among the world’s most expensive, there is an ever increasing Asian concentration at the top of the list. In last year’s survey, eight Asian cities featured in the top fifteen; now, together with the top four, all of Shanghai (6th), Beijing (8th), and Shenzhen (10th) are squeezed into the top ten, together with this year’s biggest climber – Turkmenistan’s capital Ashgabat, which rose a massive 36 places to land in at 7th.

Mercer - Cost of Living index 2019

Although Asian cities continue to rise en masse courtesy of the region’s growing economic clout – collectively projected to generate close to half of the world’s economic activity by as soon as 2035 – various specific local conditions have contributed to this year’s climb on the index, with expatriates in Hong Kong for example copping the most excessive rental rates in the world. They’re also, according to Mercer, forced to fork over $8 for a single cup of espresso.

“Despite the relatively high cost of living, many organisations still see a strong business rationale for moving talent into and within the region,” said Mario Ferraro, Mercer’s Global Mobility Practice Leader for Asia, the Middle East and Africa, before adding a caveat. “At the same time, cost considerations are still an issue, and we are seeing an increased focus on having a clear business case for the assignment, as well as measuring the return on investment.”

ZBeyond East Asia (which altogether hosts more than half of the top 35 costliest expensive cities), Bangkok has now cracked the top 40, up from 67th in just 2017, while Jakarta (105th) and Manila (109th) hover on the edge of the top hundred, rising 12 and 29 places respectively – the latter the fourth greatest jump of anywhere this year. On the other side of the ledger, Tashkent (Uzbekistan), Karachi (Pakistan) and Bishkek (Kyrgyzstan) were all in the global bottom four.

“In a skill-focused economy driven by digital disruption and the need for a globally connected workforce, deploying expatriate employees is an increasingly important aspect of a competitive business strategy for global companies,” concluded Ilya Bonic, President of Mercer’s Career business. “There are numerous personal and organizational advantages for sending employees overseas, including career development, global experience, new skillsets, and re-allocation of resources.