Gap Increases Between Singapore and Malaysia in Global Cost of Living Rankings

June 23, 20178:49 am1632 views

Singapore is now the 24th most expensive location in the world for expatriates, falling from 18th place last year. This was one of the findings of the latest Cost of Living survey published by ECA International, the world’s leading provider of knowledge, information and software for the management and assignment of employees around the world.

To ensure that an employee’s spending power is maintained when they are sent on an international assignment, a cost of living allowance is often provided as part of the pay package. This allowance will be affected by differences in prices, as well as exchange rate movements between the employee’s home and host countries.

“Prices have risen in Singapore since our last survey. Therefore, in local currency terms expatriates in Singapore will clearly have felt an increase in their cost of living in the past twelve months,” said Lee Quane, Regional Director – Asia, ECA International. “However, as the Singapore dollar has depreciated against many currencies over the course of the last year, this has made the cost of living cheaper relative to several other locations than it was a year ago.”

While Singapore and Malaysian cities have fallen in global rankings, the gap between Singapore’s cost of living and Kuala Lumpur has increased over the past 12 months – with Kuala Lumpur falling by 15 places to 212th position. Both George Town and Johor Bahru have fallen by 10 places in the global rankings to 245th and 250th respectively – out of the 262 ranked locations.

“The continued weakness of the Malaysian ringgit is responsible for Kuala Lumpur’s decline in the rankings, as well as Johor Bahru’s status as the location with the second-lowest cost of living in the region,” added Quane. “Cities in Malaysia continue to rank amongst those with the lowest cost of living for international assignees in the world, and have even become marginally cheaper over the past five years.”

Asia Pacific highlights

Hong Kong overtakes Tokyo for regional top spot

Hong Kong is Asia Pacific region’s most expensive location for expatriates, up one place from second position last year. From a global perspective, it has ascended by seven places to become the second-most expensive location for expatriates – its highest ever rankings on both fronts. Since 2011, Hong Kong has risen steadily in both the regional and global rankings.

See: Continued Demand for Mobility in the Global Workforce Challenged by Cost of Expatriate Packages

“Hong Kong has continued to get more expensive for expatriates. 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,” said Quane.

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. On a global scale, there has been some movement – other than Tokyo (retaining 7th position globally), all other ranked Japanese cities have fallen by four places, with Yokohama (16th), Nagoya (17th) and Osaka (18th).

Asia Pacific’s top 25 most expensive locations in 2017 – including global rankings and Malaysian cities

Location Regional rank 2017 Regional rank 2016 Regional rank 1-yr change Global rank 2017
Hong Kong 1 2 1 2
Tokyo 2 1 -1 7
Seoul 3 9 6 8
Shanghai 4 3 -1 13
Yokohama 5 5 0 16
Nagoya 6 6 0 17
Osaka 7 7 0 18
Beijing 8 4 -4 20
Busan 9 13 4 21
Singapore 10 10 0 24
Macau 11 12 1 25
Ulsan 12 21 9 26
Guangzhou 13 8 -5 27
Taipei 14 26 12 29
Shenzhen 15 11 -4 32
Dalian 16 14 -2 37
Chengdu 17 15 -2 38
Kaohsiung 18 31 13 40
Nanjing 19 16 -3 41
Suzhou 20 18 -2 43
Qingdao 21 20 -1 45
Tianjin 22 17 -5 46
Xi’an 23 19 -4 49
Sydney 24 27 3 50
Wuhan 25 22 -3 51
Kuala Lumpur 53 49 -4 212
George Town 61 62 1 245
Johor Bahru 62 63 1 250

“Prices in Japan have remained stable over the past year. Yen, on the other hand has weakened against most major currencies, contributing to the decline of Japanese cities in our rankings,” explained Quane. “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.”

Elsewhere, Taiwanese cities have been the highest climbers in the regional rankings, with Kaohsiung rising the most in the region from 31st to 18th rank this year. Ulaanbaatar, and Mongolia remains the cheapest location in the region followed by cities in Malaysia and Myanmar.

“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,” added Quane.

Sydney remains the most expensive city in Australia. It currently ranks 50th in the global rankings, up from 70th place last year. All ranked locations within Australia rose in our global rankings this year, with Adelaide rising the most, by 34 places to 75th position – although it is still the cheapest ranked location in Australia.

ECA International has been conducting research into cost of living for over 45 years. It carries out two main surveys per year to help companies calculate cost of living allowances, so that their employees’ spending power is not compromised while on international assignments.

Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.

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Feature image credit: freedigitalphotos.net

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