Hong Kong named the most expensive location in the world for overseas workers

• Hong Kong remains the most expensive location for expatriates to live in
• Hong Kong retains the top spot despite decreasing rental prices
• Tokyo is second in the global rankings, with New York in third place
• Four Chinese cities feature in the top 20 most expensive locations

Hong Kong has been named as the most expensive location in the world for expatriates. This was one of the findings of the latest Cost of Living research published by ECA International, the world's leading provider of knowledge, information and software for the management and assignment of employees around the world.

“Hong Kong is the most expensive place in the world for overseas workers to live, in spite of the economic impact of the Covid-19 pandemic” said Lee Quane, Regional Director – Asia at ECA International. “Hong Kong is expensive across many areas that we consider as part of our research, but it is the especially high housing costs that push it to the number one spot. This is despite seeing some lower prices in the last year in response to a drop in demand due to the pandemic and ongoing political uncertainty.”

ECA International has been conducting research into cost of living for over 45 years. It carries out two main surveys per year to help companies calculate cost of living allowances so that their employees' spending power is protected while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 480 locations worldwide. ECA’s accommodation data is also factored in, comparing rental costs in areas typically inhabited by expatriate staff in over 390 locations worldwide.

Asia Highlights

China’s tier one cities all feature in the top 20 most expensive cities in the world, with Shanghai highest in 11th place, despite a weaker renminbi, as well as low or negative inflation in many Chinese locations. 

Quane said “Chinese cities remain some of the most expensive in the world for overseas workers to live – with Shanghai, Guangzhou, Shenzhen and Beijing all in the global top 20. This is despite deflation and exchange rate weakness pushing most cities lower in the rankings. As with many other places, the main factor in the lower prices was the significant drop in petrol costs which dropped nearly 15% in many Chinese cities over the past year thanks to lower global oil prices. As the Covid-19 pandemic escalated, many cities around the world saw stringent measures brought in to try and combat the spread of the virus, including citywide lockdowns, and the resulting lack of travel meant that petrol and oil prices dropped significantly in the face of weaker demand.”

Some of the biggest drops in the rankings this year were seen in Thai and Vietnamese cities which had seen rises in the previous rankings. 

“Every Thai and Vietnamese location fell at least ten places in the rankings this year as the pandemic has hit the local economies. The Thai baht and Vietnamese dong have weakened against some major currencies during the Covid-19 pandemic, partly due to the impact on the tourism industries in the countries as fewer visitors arrive and the demand for the currency drops accordingly. It has also hit rental costs too with some drops in prices due to the weaker demand. The only Thai or Vietnamese city now in the global top 100 most expensive locations for expatriates is Bangkok, compared to three cities last year, but even the Thai capital fell 16 places in the rankings to 39th overall” said Quane.

Singapore fell slightly in the rankings to 14th place globally, from 12th last year.

Quane explained “Both the direct impact of the Covid-19 pandemic on the local economy and the fall in trade owing to the global recession impacted Singapore’s economy, contributing to the weakening of the Singapore dollar compared to the Danish kroner and Swiss franc, among other stronger currencies. As such, Copenhagen and Bern moved above the city state in the rankings this year.”

The biggest faller in the rankings in Asia this year was Mumbai, which dropped 34 places to 94th position globally. 

Quane said “Mumbai, the most expensive city in India, has plunged 30 places in the ranking this year, the most of any city in Asia. A combination of a weak rupee and some cheaper rents in the city’s expatriate rental market pushed Mumbai down the rankings. Other cities in India fared better in the ranking despite similar circumstances, mainly due to the poor performance of the currencies of many other countries around them in the rankings.”

Global Highlights

Australian cities have become more expensive for many overseas workers over the past 12 months, resulting in every location in the country moving up the rankings and Sydney entering the global top 50.

“The Australian dollar was very strong this year making goods more expensive for people coming from abroad than they were a year ago. While the country is in the middle of its first recession in 29 years quick measures taken by authorities meant the spread of cases was fairly limited compared to many other nations around the world” explained Quane.

Most European locations also saw a rise in the rankings as the euro and British pound performed strongly throughout most of 2020.

Quane said “The euro and pound rebounded this year and living costs also increased for many overseas workers, as the uncertainty around Brexit that was a constant feature throughout 2019 subsided during much of 2020. These factors pushed many major European cities up in the rankings, with London now the 6th most expensive location in the world, Paris up ten places to 29th, and Vienna and Munich entering the global top 50. However, with another Brexit deadline fast approaching we should expect further volatility.”

The drop in oil prices as a result of the Covid-19 pandemic, meant that many locations where the local economy is heavily reliant on oil saw big economic impacts, weaker currencies and drops in their rankings. This was the case in Brazil, Russia, Venezuela and others but the biggest impact was seen in Luanda, Angola which was the biggest faller in this year’s rankings – dropping 104 places from 37th to 141st.