People swim yesterday in a pool in Hong Kong
Hong Kong has risen to become the world’s most expensive city for expatriates, according to a survey by international human resources consulting firm Mercer.
Mercer, which operates internationally in more than 130 countries, compared the cost of over 200 items in 209 cities. The survey included the costs of housing, food, transport and entertainment, using New York as a basis of comparison.
According to Mercer’s 2016 Cost of Living Rankings, Hong Kong has now overtaken Luanda, Angola to become the world’s costliest city for expatriates, due to the strengthening of the U.S. dollar and subsequently, the Hong Kong dollar.
“Generally speaking, prices remained stable across the world,” Bruno Rocquemont of Mercer France told the Agence France-Presse.
Rocquemont attributes the significant change in ranking to fluctuations in exchange rates this year. The U.S. dollar strengthened against a weakened Angolan Kwanza, contributing to Luanda’s slip to second.
Hong Kong (1), Luanda (2) and Zurich (3) take the top spots in this year’s rankings; followed by Singapore (4), Tokyo (5), Shanghai (7) and Beijing (10).
Nearby cities of Shenzhen and Guangzhou were also marked as expensive, standing at 12 and 18 respectively. Shenzhen moved up two places compared with last year, while Guangzhou dropped three spots.
A number of other Chinese cities – namely Nanjing (29), Tianjin (30), Shenyang (31), Qingdao (33) and Chengdu (34) – were also listed as expensive cities.
The survey takes into account factors including currency fluctuations, cost inflation for goods and services and stability of accommodation prices. These factors provide governments and businesses with up-to-date information on the cost of living, and helps companies to determine appropriate compensation for overseas workers.
Although Macau was not featured in the Mercer survey, the city is likely to be experiencing a similar phenomenon due to its ties with the Hong Kong dollar, as well as steady price inflation in recent years.
May’s year-on-year consumer price index grew by 2.64 percent, the lowest in nearly six years. In comparison, Hong Kong’s measure of inflation shows the city tracking consistently behind Macau for the last 12 months, according to analyst website Trading Economics. This means that prices are growing faster in the MSAR.
In December 2015, ECA International released a survey in which it examined the most expensive cities in the world for expatriates. The findings indicated that Macau was on the rise, with the MSAR recording the largest annual increase in global rankings between 2014 and 2015.
Macau rose from 34th position in 2014 to 13th last year in the Asia-Pacific category. The MSAR jumped 70 places in the global rankings, edging into the world’s top 30.
However, ECA’s 2015 rankings do not entirely correlate with the more recent Mercer evaluation, perhaps because of their respective dates of publication.
In ECA’s ranking, Chinese cities dominated in the Asia-Pacific region, populating 11 of the top 20 most expensive locations. Shanghai (1), Beijing (2), Hong Kong (3) and Macau (13) were among the notable cities.
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