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Hong Kong overtakes Manhattan in list of world's most expensive cities

12 Dec 2012


Cost of living in Greater China cities rise across the board, while locations in Europe plummet

Hong Kong has shot up 26 places in the list of most expensive cities to become the 32nd most costly location for international assignees, according to a new Cost of Living survey from ECA International, the world's leader in the development and provision of solutions for the management and assignment of employees around the world.
 
The survey reveals that Hong Kong is now more expensive than Manhattan (36th) and Paris (42nd), although it remains cheaper than other regional hubs such as Beijing (22nd), Shanghai (26th), which have also jumped up the ranking, and Singapore (31st).
 
"Over the past 12 months, we have seen the cost of our representative basket of goods and services in Hong Kong increase by 6.7% - slightly more than the regional average," said Lee Quane, regional director, Asia, ECA International.
 
"At the same time, the Hong Kong dollar’s peg to a stronger US dollar is making the SAR more expensive for many companies sending employees there on assignment,” he said.
 
Within Asia, Hong Kong remains the 9th most expensive location – the same position it held a year ago. Tokyo has also retained its position as the most expensive location in Asia and the world.
 
Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out two Cost of Living Surveys per year, comparing a basket of consumer goods and services commonly purchased by assignees in more than 400 locations worldwide.
 
“Certain living costs such as accommodation rental, utilities charges, car purchases and school fees are not included in this survey. Although such items can have a significant effect on overall cost of living, they are usually compensated for separately in expatriate packages so this data is researched and published separately,” explained Quane.
 

China – increasingly expensive for international assignments

Despite Hong Kong’s rise in the global ranking, it remains cheaper than Beijing (22nd globally) and Shanghai (26th), which have climbed 13 and 15 places respectively over the year. Other mainland China locations, including Guangzhou (56th) and Shenzhen (59th), have also seen climbs. While these do still remain cheaper than the SAR, they are now more expensive than Jakarta (123rd) and Bangkok (163rd) for international assignees.
 
“This year we have seen the cost of items in ECA’s shopping basket for China increase 5%. While this is down from the 9% increases we saw a year ago it is still high compared with price inflation witnessed in other parts of the world, particularly Europe and North America where the economy has not grown at the extreme pace witnessed in China in the last few years,” said Quane.
 
“Additionally, the Renminbi has strengthened against many currencies. Together these two factors are making Chinese locations increasingly expensive. This could be stripping them of the competitive edge they once had over other locations in Asia as companies looking to set up in the region might think twice, now, about posting staff to China,” he added.
 

Asia region highlights

Over the past three years, Asian locations have climbed up the global ranking. Nine Asian locations now feature in the top 50 most costly locations for international assignees worldwide. In 2009, only four were in the top 50, none of which were Hong Kong, Singapore, Beijing, Shanghai or Seoul.
 
Tokyo is still the most expensive location in Asia and globally – despite Japan being the only location in Asia to experience price falls this year. On average, prices of items in ECA's Cost of Living basket for Asia have increased by 6.5% – significantly less than last year's average increase of 8.2%.
 
While Hong Kong and mainland Chinese locations have seen the biggest leaps up the Asian ranking this year, some of the region’s biggest falls have been witnessed in Indonesia. The weakening of the Rupiah against major currencies has contributed to Jakarta falling 32 places, to become the world's 123rd most expensive location for expatriates.
 
Karachi in Pakistan remains the least expensive Asian location in the ranking.
 

Australasia – Australian locations remain among the most expensive in the world

All Australian locations surveyed now rank in the world's top 30 most expensive locations. Sydney is the most costly, in 16th position globally, followed by Canberra (18th), Adelaide (21st), Melbourne (24th), Perth (25th), Darwin (27th) and Brisbane (28th).
 
"Just three years ago, none of the Australian locations in our survey featured in the top 60, and all were cheaper than Hong Kong. Since then, the Australian dollar has gone from strength to strength and remains high today. This makes Australia an expensive place to live: the cost of goods and services in Sydney, for example, is now 12% higher than the cost of the equivalent goods and services in Hong Kong," said Quane.
 
Auckland (41st globally) is the most expensive of the New Zealand locations surveyed. Christchurch has also risen 12 places over the year, and now sits in 55th position.
 

Europe – locations across the region fall in the global ranking

Many locations across the region fell in the global ranking as the euro and other European currencies weakened against the US dollar while prices increased at a slower rate in Europe on average than other regions over the year.
 
The Norwegian locations of Oslo and Stavanger, ranked 3rd and 8th in the world respectively, are the region’s most expensive locations. The free-floating Norwegian krone has been strong for much of the last two years, reflecting the country's relative economic success. They are followed by the Swiss cities of Zurich (9th), Geneva (10th) and Bern (11th).
 
The on-going financial crisis in Greece and Spain has seen Athens fall 47 positions in 12 months to 109th spot in the global ranking, while Madrid, dropped 44 places to 105th.
 
One of the biggest falls down the global ranking has been witnessed in Portugal – another country hit by the sovereign debt crisis. Lisbon fell from 98th to 158th position over the year.
 
London and locations surveyed in Russia, Turkey and Ukraine have proved more resilient. London gained 11 places and now sits in 58th position globally. Istanbul rose 21 places to 34th while the Turkish capital, Ankara, rose 31 positions to 121st globally – one of the biggest rises in this survey. The lira has strengthened against major currencies in the past twelve months. In addition, prices in ECA’s cost of living basket in Turkey have increased at a faster rate this year than last.
 
The Moldovan capital of Chisinau remains the least expensive European city surveyed.
 

Americas – Vancouver most costly North American location, while Brazilian cities fall

The Canadian city of Vancouver is North America’s most expensive location for the second year in a row. The city ranks 35th globally and is followed by Manhattan. The strengthening of the US dollar against major currencies has led to all of the US locations surveyed moving up the ranking in the past 12 months – despite the cost of items in the cost of living basket increasing at a slower rate than many other parts of the world.
 
In South America, the Venezuelan capital, Caracas, sitting in 7th position globally, is the most expensive city followed by Argentina's Buenos Aires (47th globally). The Brazilian locations of Rio de Janeiro (64th) and Sao Paulo (69th) follow. However, both have fallen more than 40 places in the ranking in the past 12 months – largely a result of the weakening of the Brazilian real against the US dollar and other major currencies.
 

Africa and Middle East – Angolan city of Luanda most expensive in Africa

Africa’s most expensive location is the Angolan capital, Luanda. Globally the city is back in the top 10 most expensive locations having moved up from last year's 11th position into 4th. It is followed by South Sudan capital of Juba (14th) and the Democratic Republic of Congo's Kinshasa (19th).
 
The Egyptian capital, Cairo has risen 15 places to 219th while South African locations continue to fall down the ranking. Johannesburg is currently in 222nd spot – down from last year's 204th position.
 
Despite falling 13 positions globally, the most expensive Middle Eastern location surveyed remains Tel Aviv, ranking 45th overall. Dubai has risen 14 places to 173rd worldwide while Jeddah, at 224th, is the least expensive location surveyed in the region.
 
 

Notes to Editors

Figures used in this release were taken from ECA's Cost of Living Survey.
 
Follow ECA on twitter: https://twitter.com/ecaintl  
 

About ECA's Cost of Living Survey

ECA International's cost of living indices are calculated based upon surveys carried out annually in March and September using a basket of day-to-day goods and services.  The data used above refers to year-on-year movements between ECA's September 2012 and 2011 surveys.
 
The data is used by ECA clients to calculate cost of living allowances for assignees. The survey covers:
Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
Basic: Drink and tobacco; miscellaneous goods; services
General: Clothing; electrical goods; motoring; meals out
 
Certain living costs such as accommodation rental, utilities charges (electricity, gas, 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.
 

Top 50 most expensive cities worldwide for international assignees

Country

Location

Global ranking 2012

Global ranking 2011

Japan
Tokyo
1
1
Japan
Nagoya
2
4
Norway
Oslo
3
2
Angola
Luanda
4
11
Japan
Yokohama
5
6
Japan
Kobe
6
10
Venezuela
Caracas
7
13
Norway
Stavanger
8
8
Switzerland
Zurich
9
5
Switzerland
Geneva
10
3
Switzerland
Bern
11
7
Switzerland
Basel
12
9
Papua New Guinea
Port Moresby
13
28
South Sudan
Juba
14
60
Russia
Moscow
15
16
Australia
Sydney
16
15
Denmark
Copenhagen
17
12
Australia
Canberra
18
17
Democratic Republic of the Congo
Kinshasa
19
30
Sweden
Stockholm
20
19
Australia
Adelaide
21
24
China
Beijing
22
35
Korea Republic
Seoul
23
21
Australia
Melbourne
24
23
Australia
Perth
25
25
China
Shanghai
26
41
Australia
Darwin
27
27
Australia
Brisbane
28
26
Finland
Helsinki
29
14
Gabon
Libreville
30
18
Singapore
Singapore
31
31
Hong Kong
Hong Kong
32
58
Sweden
Gothenburg
33
37
Nigeria
Abuja
34
49
Canada
Vancouver
35
43
United States of America
Manhattan NY
36
46
Canada
Ottawa
37
50
Nigeria
Lagos
38
84
Azerbaijan
Baku
39
71
Canada
Toronto
40
57
New Zealand
Auckland
41
44
France
Paris
42
20
Canada
Montreal
43
63
Russia
St Petersburg
44
52
Israel
Tel Aviv
45
32
New Zealand
Wellington
46
51
Argentina
Buenos Aires
47
96
Senegal
Dakar
48
36
United States of America
New York NY
49
79
United States of America
Honolulu HI
50
74

Most expensive locations in Asia for international assignees

Asia Ranking 2012

Location

Asia Ranking 2011

Global Ranking 2012

1
Tokyo
1
1
2
Nagoya
2
2
3
Yokohama
3
5
4
Kobe
4
6
5
Beijing
7
22
6
Seoul
5
23
7
Shanghai
8
26
8
Singapore
6
31
9
Hong Kong
9
32
10
Busan
10
52
11
Guangzhou
13
56
12
Shenzhen
14
59
13
Taipei
12
63
14
Ulsan
11
66
15
Shenyang
17
81
16
Tianjin
18
85
17
Qingdao
19
88
18
Dalian
20
93
19
Chongqing
21
109
20
Suzhou
23
113
21
Chengdu
24
114
22
Wuhan
25
119
22
Xiamen
25
119
24
Nanjing
27
122
25
Jakarta
15
123
26
Xi'an
28
124
27
Kaohsiung
16
127
28
Bangkok
22
162
29
Kuala Lumpur
30
178
30
Surabaya
29
182
31
Vientiane
33
185
32
Metro-Manila
32
187
33
Chiang Mai
31
189
34
Johor Bahru
35
195
35
New Delhi
34
201
36
Hanoi
41
204
37
Ulaanbaatar
39
205
38
George Town
37
214
39
Mumbai
36
215
40
Ho Chi Minh City
43
216
41
Dhaka
40
219
42
Colombo
38
224
43
Bangalore
42
227
44
Chennai
44
234
45
Pune
46
236
46
Hyderabad
45
237
47
Kolkata
47
240
48
Islamabad
48
241
49
Karachi
49
243

 
About ECA International
ECA is the world's leader in the development and provision of solutions for the management and assignment of employees around the world. Delivering data, expertise, systems and support in formats which suit its clients, ECA's offer includes a complete 'out-source' package of calculations, advice and services for companies with little international assignment management experience or resource; subscriptions to comprehensive online information and software systems for companies with larger requirements; and custom policy and system development projects for companies who manage thousands of international assignees around the world.

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