Eight of the world’s top 10 most expensive cities are located in Asia as a result of the region’s high costs for consumer goods and a dynamic housing market, according to Mercer’s 2019 Cost of Living Survey.
Hong Kong tops the list as the world’s costliest city for the second consecutive year with the local housing market increasingly out of reach for many.
Other cities appearing in the top 10 are Tokyo (2), Singapore (3), Seoul (4), Zurich (5), Shanghai (6), Ashgabat (7), Beijing (8), New York City (9), and Shenzhen (10).
However, Hong Kong’s property prices weren’t all to blame, said Mario Ferraro, Mercer’s Global Mobility Practice Leader for Asia, Middle East and Africa.
“While it’s true that property costs are a key factor for Hong Kong’s top ranking, the underlying reason is that there is still strong demand for accommodation suitable for expatriates to a standard they expect and in locations popular with expatriate communities,” he noted.
“With Hong Kong’s inflation having been relatively low in the year leading up to the survey, it’s clear that the strengthening US dollar is also a major factor influencing the high costs in Hong Kong,” he said.
China’s yuan lost more than six per cent to the US dollar over the past year causing some Chinese cities to drop in ranking, the firm said.
Shanghai, however, rose one place due to price movement, as did Beijing with increasing rental prices. Shenzhen and Chengdu (30) rose two and one places respectively due to the movement of other cities in the ranking, Mercer added.
Ferraro pointed out that Asia continued to be a major engine of global economic growth.
Despite the relatively high cost of living, many organizations still see a strong business rationale for moving talent into and within the region, Ferraro observed.
“At the same time, cost considerations are still an issue, and we are seeing an increased focus on having a clear business case for the assignment, as well as measuring the return on investment,” he said.
This year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment, according to Mercer.
Of the world’s major cities, the costs of movie tickets, coffee, property rental and petrol in Hong Kong were the most expensive, with Beijing topping the list for a price of milk at USD $4.45 in comparison to just USD $1.21 in New York, Mercer pointed out.