Hong Kong has retained its title as the world’s most expensive city for expatriates to live in for the third year running, with ECA International – the firm behind the rankings – saying the city’s high cost of living combined with tough coronavirus policies have pushed foreign employees to choose Singapore and Dubai instead. Rounding out the top five in the cost-of-living survey were New York, Geneva, London and Tokyo. Asian cities accounted for half of this year’s top 10 most expensive cities for expatriates. Shanghai and Guangzhou were two of the highest-ranked mainland China cities, in eighth and ninth place respectively. Seoul was placed No 10. Lee Quane, ECA International’s Regional Director for Asia, said: “Although Hong Kong has been less affected by rising global inflation than other regional and global locations in the past year, it nonetheless remains the world's most expensive location.”
ECA calculated its own inflation rate based on a basket of everyday goods and services, and found that prices in Hong Kong, driven by fuel costs, had risen by 3% year-on-year as of March, lower than the global average of 5.8%. But the continued strength of the Hong Kong dollar – which is pegged to the U.S. dollar – while other currencies weakened, has contributed to the high cost of living. Hong Kong’s official inflation rate stood at 1.6% year-on-year as of April. The biannual survey compared data compiled in March 2021 and March 2022, and took the cost of food, household goods, recreational goods and services, clothing, restaurant visits, alcohol and tobacco into account. The cost of accommodation rentals, utilities and transport was also considered.
Quane noted that rental costs in particular were also rising in Singapore, driven by the number of people relocating or returning home to the city state. But Hong Kong’s regional rival kept its place at No 13 despite the significant price increases, including in areas such as utilities and petrol. Hong Kong, meanwhile, had become less attractive for expatriates, he said, adding that the city’s management of the coronavirus pandemic had played a pivotal role. While cities such as Singapore had largely lifted travel restrictions and mandatory rules for mask-wearing outdoors, Hong Kong kept tough social-distancing and travel curbs in place. He said the firm was seeing a talent outflow, with Western expatriates either returning to their home countries or going to other destinations. Singapore and Dubai, in particular, were benefiting from the exodus, the South China Morning Post reports.