International banks will have to consider salary increases in Hong Kong which is now the Asia Pacific region’s most expensive location for expatriates.
Hong Kong is the Asia Pacific region’s most expensive location for expatriates and the second-most expensive on a global scale.
This was one of the findings of the latest Cost of Living survey published by ECA International, the provider of knowledge, information and software for the management and assignment of employees around the world.
Hong Kong is up one place from second position in the regional rankings. From a global perspective, it has climbed seven places to become the second-most expensive location for expatriates – its highest ever rankings on both fronts.
U.S. Dollar Peg Hurts
Since 2011, Hong Kong has risen steadily in both the regional and global rankings, and continued to get more expensive for expatriates.
Over the past few years, the Hong Kong dollar has appreciated against most major currencies, owing to its peg to the U.S. dollar, which has pushed up the price of goods and services relative to those in locations whose currencies have weakened against the greenback.
For companies who send staff into Hong Kong and provide cost of living allowances to protect their purchasing power, they will likely need to increase them to ensure that their employees’ buying power remains protected.
Hong Kong Overtakes Tokyo
In Japan, Tokyo has fallen by one place to second-most expensive location in Asia. All other ranked locations in Japan maintained their positions in the regional rankings.
The yen, has weakened against most major currencies, contributing to the decline of Japanese cities meaning that for many companies, the cost of maintaining their assignees' purchasing power while posted here has fallen.
Shanghai remains the most expensive city in mainland China but has fallen in the global rankings to the 13th most expensive location. All other first-tier Chinese cities have seen more significant declines in both ECA’s regional and global rankings.
London Cheaper Than Bangkok
Singapore has remained relatively stationary in the Asia Pacific regional rankings – unmoved in the past 12 months. However, it has fallen by six places to 24th on the global stage.
Central London is the 132nd most expensive location in the world for expatriates, down 67 places from last year, falling out of the top 100 most expensive cities in the world.
London is now cheaper than Bangkok, Rio de Janeiro and Buenos Aires, as well as its European rivals Paris, Berlin and Brussels, thanks to the weak pound.
