Hong Kong has be named the most expensive city in which to live and work overseas this year, according to a new report which highlights the impact of rising living costs and worsening macroeconomic trends on the expatriate market.
The city rose one place in Mercer’s 2022 Cost of Living index to regain pole position after being bumped to second place in 2021 by Ashgabat, Turkmenistan. It marks the fourth time in five years that the Asian financial hub has been ranked as the costliest location for overseas workers.
Hong Kong’s resurgence was driven partially by rising inflationary pressures, which have pushed living costs higher across the globe. Meanwhile, ongoing Covid restrictions and increased political volatility have made it more expensive to compensate staff who are posted there, Mercer partner Vince Cordova told CNBC Make It.
“Part of it is the real estate market,” said Cordova, noting that desirable accommodation has now become more expensive, pushing up the cost of expat packages.
“The other part is the cost of goods and services and also the political uncertainty. The people who are going to be there will need to spend more to live well,” he said.
The city was bumped 13 places in the Economist Intelligence Unit’s Global Liveability Index 2022 last week, amid what the EIU cited as its loss of political and cultural freedom.
Hong Kong was the Asian outlier in a top five dominated by Swiss cities in Mercer’s 2022 Cost of Living index: Zurich, Switzerland ranked as the world’s second most expensive city for overseas workers, followed by Geneva (3rd), Basel (4th) and Bern (5th).
Cordova said that was thanks to the strength of the Swiss franc, which has, until recently, held steady against a rising U.S. dollar, the benchmark currency in Mercer’s report.
How it works
Mercer’s annual cost of living index, now in its 28th year, is designed to help companies and governments determine pay packages for expatriate employees by measuring accommodation costs and the price of goods and services within local markets against their relative cost in New York City.
This year’s index ranked 227 cities and took into account the prices of more than 200 items — from categories such as food, transportation, housing and personal care — as of March 2022.
Unlike previous years, Cordova said, the 2022 report also noted the increasing prevalence of remote work, with more companies using it as a tool when deciding their flexible working policies.
“One of the consequences of the pandemic was this concept of work from anywhere, with more employees now asking employers if they can support that,” he said.
“Companies now want some information on what the economic impact of that relocation would be, and that’s how we’re seeing mobility expand,” he added.
Here’s a rundown of the 10 most expensive cities for expats, according to Mercer’s findings.
The most expensive cities for expats
- Hong Kong, Hong Kong (SAR)
- Zurich, Switzerland
- Geneva, Switzerland
- Basel, Switzerland
- Bern, Switzerland
- Tel Aviv, Israel
- New York City, United States
- Singapore, Singapore
- Tokyo, Japan
- Beijing, China
Ankara, Turkey (227th) ranked as the least expensive city to work abroad, followed by Bishkek, Kyrgyzstan (226th), Dushanbe, Tajikistan (225th), Islamabad, Pakistan (224th) and Karachi, Pakistan (223rd).
Source:
CNBC
Image Source:
Pixabay
