6 of the 10 most expensive cities in the world are in Asia

18 June 2020 Consultancy.asia

Hong Kong remains the most expensive city in the world to work and live in, while five other Asian urban centres also rank among the globe’s ten most expensive cities.

Mercer’s 26th ‘Cost of Living Survey’ is the latest edition in the firm's annual series designed to inform multinational companies across the globe, as they devise mobility programmes for their workforce.  

The human resources consulting firm uses pricing data of more than 200 products and services, as well as accommodation costs, education costs, travel expenses and other metrics to identify global urban centres that will require the largest expatriate compensation package. New York City is the baseline for the survey, while all currency fluctuations are examined against the dollar.

With this framework, Hong Kong has emerged atop the list as the most expensive city in the world for three years now. Mercer attributes its position at the top to currency fluctuations against the dollar, while soaring rental prices also play a factor.

In second place this year is the Turkenistani capital of Ashgabat, displacing Tokyo, which dropped from second to third in the latest index. Zurich emerged in fourth on Mercer’s index, while Singapore’s presence in fifth brought the tally up to four Asian cities in the top five. Singapore dropped from its ranking in third place last year.

6 of the 10 most expensive cities in the world are in Asia

In sixth is New York, up from ninth last year, while Shanghai is the first Chinese city to make the list in seventh. Shanghai fell from its position in sixth, which Mercer said is indicative of an overall fall in the rankings for Chinese cities. The Yuan’s depreciation against the dollar is the main explanation for the countrywide drop in rankings.

Swiss cities Bern and Geneva follow, while Beijing rounds up the top ten on Mercer’s index, having dropped from eighth place last year. Asian cities make up half of the next ten on the list as well, with Seoul, Tel Aviv, Shenzhen, Lagos and Guangzhou all making an appearance in Mercer’s top 20.

Mercer’s index is published with the intention of informing global mobility programmes, which are currently in crisis due to the Covid-19 pandemic and the resultant travel restrictions. Mercer collected its data in March, acknowledging that the rankings will be fluctuating rapidly as the economic impact of the crisis unfolds.

“The Covid-19 pandemic has posed complex challenges to businesses and the Asian Development Bank estimates global economic impact to be between $5.8 trillion and $8.8 trillion this year. The situation remains fluid and uncertain; organisations need to plan, observe and be agile in their response and more importantly, keep their workforce engaged throughout,” explained Renee McGowan, CEO of Mercer in Asia.

McGown added that the scenario will get more exciting as things begin to open up. “As countries in Asia now begin to review the travel restrictions that have been put in place, companies will have to further assess its impact on employee mobility and their strategies.”