News

Asia's most expensive cities

8 Dec 2011

Singapore and Beijing are the sixth and seventh most expensive cities within Asia respectively, surpassing Hong Kong, which stood at sixth place last year, while Tokyo retains its position as the most expensive city within Asia and the world.

According to the ECA International Cost of Living September 2011 survey, Hong Kong’s ranking within Asia fell to ninth most expensive city in the region this year, while globally Hong Kong fell from 32nd to 58th position - a fall attributed to inflation of basic commodities globally and the weakening US Dollar.

The survey, conducted twice every year, compares prices of a basket of daily goods in more than 400 locations including food, clothing and daily services in order to aid multinational corporations (MNC) determine salaries and cash allowances for employees around the world. Housing, utilities, school fees or medical fees are left out of the survey as those would usually be included separately as benefits within an expatriate package.

“Prices, in general, have risen quite considerably in Hong Kong, however, compared to other locations Hong Kong is becoming cheaper,” said Lee Quane, regional director of ECA International. This is due to the fact that the Hong Kong Dollar, which is pegged to the US Dollar, is weakening while other currencies in the region, such as the Singapore Dollar and the Australian Dollar, have strengthened leading to 70 per cent of Asian cities included in the survey becoming more expensive.

The rise of Beijing and Shanghai in the rankings is due to a stronger Renminbi as well as a higher inflation rate. Prices for goods within the region on average rose by eight per cent, while China witnessed a nine per cent inflation rate.

Other locations have seen double-digit inflation rates, such as India, Bangladesh and Vietnam, without a strengthening currency therefore driving costs up for locals but increasing purchasing power of expatriates in those countries.

However, according to Quane, if housing were to be included in the survey, Hong Kong would be the second most expensive city in Asia, after Tokyo.

Although salaries and allowances are not the largest factors affecting MNCs’ decision on where to transfer employees, Hong Kong’s fall will definitely give it a slightly more competitive edge over Singapore, especially when coupled with Hong Kong’s geographical location and business-friendly atmosphere.

For more information, visit www.eca-international.com

City

Rank in Asia

Global Rank

Tokyo

1

1

Nagoya

2

4

Yokohama

3

6

Kobe

4

10

Seoul

5

21

Singapore

6

31

Beijing

7

35

Shanghai

8

41

Hong Kong

9

58

Busan

10

63

 

Alisha Haridasani

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