• Hong Kong drops from second to 11th in the Cost of Living rankings
• Cost of living in Chinese cities continues to rise, with Shanghai the most expensive
• Taiwanese cities fall in the rankings, Taipei now out of global top 30
• Tokyo is the most expensive Asian city in seventh place globally
Hong Kong saw a significant drop in the cost of living rankings for overseas workers, falling in the space of 12 months from the second most expensive location in the world to 11th. This was one of the findings in the latest cost of living survey 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 has dropped nine places in ECA’s Cost of Living rankings, dropping to its lowest position since 2015.
“Although the price of goods has continued to rise in Hong Kong in the past 12 months, the Hong Kong dollar has weakened over the same period of time” said Lee Quane, Regional Director – Asia at ECA International. “This has meant that Hong Kong has fallen behind Tokyo, Seoul and Shanghai in the rankings”.
ECA International has been conducting research into cost of living for over 45 years. It carries out two main cost of living surveys per year to help companies calculate cost of living allowances so that their employees' spending power is not compromised while on an international assignment. ECA’s research compares a basket of like-for-like consumer goods and services commonly purchased by assignees in 475 locations worldwide. Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.
Exchange rates have been the main cause of movements in the rankings in the past 12 months. “Rates of price increases throughout most of the major locations in Asia researched has been quite low,” explained Quane. “Currency movements, on the other hand have been quite volatile with several emerging market currencies strengthening against the US dollar in the last year.”
Every one of the Chinese cities included in the survey has seen a rise in the rankings from last year. Shanghai was the highest placed Chinese city on the list in 10th place overall.
Quane said “There has been a major rebound for the Chinese cities in our latest Cost of Living rankings. Last year we reported that Chinese locations had all dropped in the rankings but 12 months later the long-term upward trend has returned, and they have risen significantly. However, the stronger yuan pushed all locations up in our rankings, with Shanghai overtaking Hong Kong.”
In contrast, the Taiwanese cities included in ECA’s rankings, Taipei and Kaohsiung, saw a fall in the cost of living for overseas workers.
Quane said “Taipei dropped out of the 30 most expensive locations globally, whilst Kaohsiung has dropped out of the global top 40. This is because price rises have been relatively benign in Taiwan in the past 12 months, and the fact that the Taiwan dollar has strengthened against the US dollar at a slower rate than several other currencies in the past year. However, locations in Taiwan are still ranked significantly higher than they were five years ago* when neither city was featured in the global top 75. Both have seen significant rises over this period, especially Kaohsiung which has risen 104 places since 2013.”
Tokyo is now the most expensive location in Asia to live in, despite staying in seventh place in the rankings.
“Tokyo’s global ranking has remained relatively static over the past few years. It is only the yen’s relative strength against the US dollar that has seen the Japanese capital has become the most expensive place in Asia for foreigners to live and work at Hong Kong’s expense. It has been a similar theme in Seoul, which is also now above Hong Kong in the rankings, despite remaining in eighth place globally” explained Quane.
Meanwhile, Singapore saw a slight rise its ranking but is still ranked lower than it was at its peak in 2016.
Quane said “The Singapore dollar has performed better over the past 12 months against the US dollar than it had done in the previous year, leading to a slight increase from 24th place up to 20th. However, some European locations such as Copenhagen and Stavanger have seen greater rises in the cost of living meaning that, although Singapore has re-entered the global top 20, it is still not as high as in 2016 when it featured at 18th.”
Inflation in Venezuela has rocketed over the past year causing a significant hike in the cost of living. Caracas, Venezuela now tops ECA’s list of the most expensive cities in the world, overtaking Hong Kong, all cities in Switzerland and last year’s most expensive location, Luanda.
Quane said “The economic situation in Venezuela has become increasingly volatile with inflation reaching an astounding 7000 (seven thousand) percent in the year to March 2018 and 1800 percent over the last six months alone. The cost of goods has increased exponentially as the economic and political situation has deteriorated and despite the plummeting value of the peso, Caracas sits at the top of our Cost of Living rankings.”
In Europe, rankings have largely gone up, with locations such as Rome, Paris and Dublin rising by over 40 places each.
Quane said “The euro has performed significantly better over the past twelve months compared to the previous year, so we have seen living costs increase in a number of European nations. Cities such as Rome and Brussels have risen by over 50 places.”
Swiss cities continue to dominate the top of the rankings – with four locations in the global top ten.
Notes to Editors
* Please note that when ‘five years’ is referenced in the text this is referring to the period between ECA’s March 2013 and March 2018 surveys.
Figures used in this release were taken from ECA's March 2018 Cost of Living research.
About ECA International
ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.
Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.
We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.
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About ECA's Cost of Living research
ECA International's main cost of living research is carried out in March and September by collecting prices of a basket of day-to-day goods and services commonly purchased by assignees. The data used above refers to year-on-year movements between ECA's March 2013 to 2018 surveys. ECA’s cost of living survey rankings began in 2004.
Although ECA International undertakes research of the cost of living in over 475 locations, within our Cost of Living rankings we look at approximately 260 locations.
Cost of living indices are used by ECA’s clients to calculate cost of living allowances for assignees. The survey covers:
Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
Basic: Household goods; recreational goods; general services; leisure services
General: Clothing; electrical goods; motoring; meals out; alcohol and tobacco
Certain living costs such as accommodation rental, utilities charges (electricity, gas, and water), car purchases and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.
This comparison of cost of living was calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons, and different levels of shopping efficiency.
For further information, please contact:
Lee Quane (Hong Kong)
Regional Director - Asia
Tel: +852 2121 2388
Tel: +852 3944 5015