Singapore has experienced a significant rise up ECA’s cost of living rankings and is now the 12th most expensive location in the world for expatriates. This was one of the findings from 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.
“Singapore’s rise in our rankings is largely due to another strong year for the Singapore dollar,” said Lee Quane, Regional Director – Asia at ECA International. “While increases in prices have been small over the past year, the strength of the Singapore dollar relative to other currencies makes Singapore the 12th most expensive location in the world and the sixth in Asia, overtaking Beijing, Busan and Yokohama from a year ago. This also marks the continuation of a longer-term trend, with Singapore rising 18 places since 2014 when it was 30th in the global rankings.”
ECA’s Cost of Living Survey compares a basket of like-for-like consumer goods and services commonly purchased by international assignees in 482 locations worldwide. The survey helps businesses ensure that their employees’ spending power is maintained when they are sent 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. ECA International has been conducting research into cost of living for over 45 years.
Hong Kong is now the fourth most expensive location in the world for expatriates, up from 11th last year, and the second most expensive location in Asia. After being ranked in 28th place just five years ago, Hong Kong now sits only behind Ashgabat, Turkmenistan and the Swiss cities, Zurich and Geneva.
Quane said: “Hong Kong is now one of the top five most expensive locations for expatriates, primarily due to the continued strength of the Hong Kong dollar and relatively higher rates of inflation witnessed in the Special Administrative Region in the past 12 months. Prices in Hong Kong rose at a faster rate in the past 12 months compared to Tokyo, Shanghai and Seoul – all of which were ranked higher in our previous survey.”
The Chinese cities included in the rankings all remained fairly static, with none of the 14 locations moving more than four places. Shanghai was the only Chinese city to feature in the global top 10, staying in 10th place.
“The Chinese Yuan has been very stable compared to other currencies during the survey period. Inflation in tier one cities such as Beijing and Shanghai have been much more moderate when compared to other Asian cities which are situated towards the upper end of our rankings. Prices have risen at a faster rate in tier two locations, resulting in a narrowing gap in living costs for expatriate workers in tier one and tier two cities in the past year. This represents the continuation of a trend we have observed, with several developing cities such as Chengdu and Tianjin rising significantly in our rankings over the course of the past five years. All 14 of the Chinese cities in our rankings now feature in the global top 50, as compared to five years ago when there were only four,” explained Quane.
Elsewhere in Asia, Thai cities saw another significant rise in the cost of living rankings, with capital city Bangkok jumping by 36 places.
Quane said: “We have seen the cost of living in Thailand increase over several years now. Bangkok especially has risen by over 100 places in the space of five years, and is now the 63rd most expensive location in our list. In doing so, it has moved into a category of relatively expensive locations in Asia. The city is now significantly more expensive than regional capitals including Jakarta, Kuala Lumpur and Manila.”
The location with the highest cost of living in the world was Ashgabat in Turkmenistan, which rose a staggering 110 places from last year.
Quane said: “Although the rise of Ashgabat in the rankings may be a surprise to some, those familiar with the economic and currency issues experienced by Turkmenistan over the past few years may have seen this coming. Ever-escalating levels of inflation, coupled with a prominent illegal black market for foreign currencies have pushed up the cost of imports. This implies that the costs for visitors in Ashgabat, at the official exchange rate, have increased enormously – putting it firmly at the top of the rankings.”
See also: Job Forecast in Singapore Remains Stable in Q3 2019: Report
All Eurozone cities have seen a marked fall in their rankings compared to last year, after an uncertain year for the Euro that saw prominent European locations such as Berlin, Rome and Madrid drop over 20 places in the rankings.
Quane explained: “The Euro has had a mixed performance over the past 12 months or so and has suffered in comparison to other major currencies. This has resulted in nearly all of the European cities in our list falling in the rankings, with those in the Eurozone experiencing the most significant drop. The only European locations that bucked this trend were cities in the United Kingdom which were fairly static, and a few Eastern European locations that were unaffected by the poor performance of the Euro.”
Cities in the United States (US) all saw big rises in the cost of living rankings, as the US dollar strengthened. Philadelphia and Boston each rose by over 40 places from last year, while Manhattan was the highest placed US location after moving up nine places to 21st place.
“The strong US dollar has resulted in dramatic rises in the rankings for all locations in the US, implying that expatriates and overseas visitors to the US will now find that they need more of their home currency to buy the same goods and services as they did just one year ago. However, there are no US cities featured in the global top 20 and the vast majority still sits outside of the global top 50. As such, the US still remains generally cheaper than many places in the world,” said Quane.
There were major moves up the ranking for countries in the Middle East, often due to many countries in the region pegging their currency to the US dollar. One such example is Doha, Qatar which saw the most significant rise as it jumped over 50 places to 52nd place after prices were pushed up by the currency strength. Newly introduced ‘sin taxes’ also raised the prices of alcohol and soft drinks dramatically. Meanwhile, Tel Aviv entered the top 10 most expensive locations in the world for the first time, while Dubai jumped 13 places to enter the global top 50. Conversely, the Iranian capital Tehran was named as the cheapest location in the world in ECA’s rankings as its weakened economy was made worse by the introduction of US sanctions, severely affecting the nation’s international trade capabilities.
Top 10 most expensive locations – Asia
|Location||2019 ranking||2018 ranking|
|Seoul, Korea Republic||4||2|
|Busan, Korea Republic||9||6|
Top 10 most expensive locations – Global
|Location||2019 ranking||2018 ranking|
|Seoul, Korea Republic||8||8|
|Tel Aviv, Israel||9||14|
Read also: Gig Economy Has Positive Effects on Mental Health: Study