Hong Kong has replaced Tokyo as the Asia Pacific region’s most expensive place for expatriates, according to a recent report by ECA International. Hong Kong also placed second in the global list, as it was outranked only by Angola’s capital, Luanda.
Lee Quane, the firm’s regional director for Asia, said the appreciation of the Hong Kong dollar against other currencies may have caused the city’s climb to its highest ever ranking. “Over the past few years, the HK dollar has appreciated against most major currencies, owing to its peg to the US dollar, which has pushed up the price of goods and services relative to those in locations whose currencies have weakened against the greenback,” Quane.
“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,” the executive added.
Tokyo fell to second place in APAC and seventh globally amid stable prices over the past year. Quane pointed out that the yen has weakened against most major currencies – “This means that for many companies, the cost of maintaining their assignees' purchasing power while posted here has fallen and international assignees based in Japan may see their cost of living allowances decrease.”
Singapore has remained relatively stationary in the Asia Pacific regional rankings – unmoved in the past 12 months at 10th place. However, it has fallen by six places to 24th on the global stage.
“Much of the movement in the rankings amongst Asian locations in the past 12 months has been strongly influenced by currency movements, with Yangon falling in the regional rankings on account of depreciation of its currency in the past year,” said Quane.
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