It is also the world's second-costliest city.
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 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 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 that employee’s home and host countries.
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. Since 2011, Hong Kong has risen steadily in both the regional and global rankings.
“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 Lee Quane, Regional Director – Asia, ECA International. “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.”
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 assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 460 locations worldwide. 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.
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).
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