Asian cities dominate 'most expensive' list for expats

Eight out of the top ten of the world’s most expensive cities for expatriates are in Asia, according to this year's Cost of Living Survey compiled by Mercer.

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For the second year running, Hong Kong tops the list because of the high cost of expatriate consumer goods – much of it due to prices pegged to the strength of the dollar – and a "dynamic" housing market.Tokyo, Singapore and Seoul occupy the next three places, while Zurich and New York are the only non-Asian cities to appear in the top ten.Mercer's annual survey, which is recognised as one of the world’s most comprehensive, is designed to help multinational companies and governments determine compensation allowances for their expatriate employees.

500 cities included in the survey

New York is used as the base city for all comparisons, and currency movements are measured against the dollar. The survey includes more than 500 cities throughout the world and this year’s ranking includes 209 cities across five continents, measuring the comparative costs of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.“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,” said Ilya Bonic, president of Mercer’s career business.“There are numerous personal and organisational advantages for sending employees overseas, including career development, global experience, new skillsets, and re-allocation of resources. By offering fair and competitive compensation packages, organisations can facilitate moves that drive business results.”Meanwhile, the world’s least expensive cities for expatriates are Tunis (209), Tashkent (208), and Karachi (207).

UK cities fallen in the rankings

Several UK cities have fallen in the rankings this year, with London dropping from 19th to 23rd, and with Birmingham (135th), Aberdeen (137th) and Belfast (158th) also going down the table. The one exception was Glasgow, where increases in the cost of living saw it climb three places in the ranking (from 148 to 145).“UK cities’ fall in this year’s ranking is mainly due to a strengthening of the US dollar against the pound,” said Kate Fitzpatrick, Mercer's global mobility practice leader for the UK and Ireland.“Price inflation remains low, keeping any increases in the cost of living to a minimum for expatriates and locals alike. When considered alongside consistently high positions in our affiliated Quality of Living ranking, these findings indicate that the UK remains an attractive destination for organisations looking to relocate personnel to international business and financial centres, in spite of well-publicised macro headwinds, including Brexit.”In the Europe, Middle East and Africa region as a whole, Bern and Geneva are rated as the most expensive for expats after Zurich. Eastern and central European cities, including Moscow (27), St. Petersburg (75), Prague (97) and Warsaw (173) all became less expensive than last year.

European currencies weakened against the US dollar

Western European cities, including Milan (45), Paris (47), Oslo (61), Madrid (82) and Berlin all fell in the rankings as well.“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar, which pushed most cities down in the ranking,” explained Ms Fitzpatrick. “Additionally, other factors like recent security issues and concern about the economic outlook, have impacted the region.”Tel Aviv, in 15th position, continued to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (33), and Riyadh (35). Cairo (166) remains the least expensive city in the region.In Africa, and despite dropping out of the top ten since last year, N’Djamena in 11th spot remains the highest-ranking city on the continent.And in the US, cities climbed in the rankings due to the strength of the dollar. New York jumped four places to rank ninth while San Francisco, Los Angeles, Chicago, Washington DC, Miami and Boston all jumped up the table.Portland, Oregon, in 107th place, and Winston Salem, North Carolina, in 138th, remain the least expensive US cities for expatriates.Australian cities such Sydney, Melbourne and Perth, have continued to fall in the rankings, again due to the depreciation of the local currency against the dollar.

Mercer's top 20 most expensive cities for expats (last year's ranking in brackets):

  1.  (1) HONG KONG
  2.  (2) TOKYO
  3.  (4) SINGAPORE
  4.  (5) SEOUL
  5.  (3) ZURICH
  6.  (7) SHANGHAI
  7.  (43) ASHGABAT, Turkmenistan
  8.  (9) BEIJING
  9.  (13) NEW YORK
  10.  (12) SHENZHEN
  11.  (8) N'DJAMENA, Chad
  12.  (10) BERN
  13.  (11) GENEVA
  14.  (21) VICTORIA, Seychelles
  15.  (16) TEL AVIV
  16.  (28) SAN FRANCISCO
  17.  (15) GUANGZHOU
  18.  (35) LOS ANGELES
  19.  (23) OSAKA
  20.  (14) COPENHAGEN
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