HK now less expensive for expats
SAR crashes out of world’s 10 most costly cities, as Japan tops the list in Asia Pacific, survey finds
Companies assigning staff to Hong Kong may expect to pay lower cost of living allowances after the city dropped out of the roster of the world’s 10 most expensive cities for expatriates.
The finding came in the latest study conducted by London-based human resource consultant ECA International, which found that Hong Kong has also slipped from third place in 2015 to the fifth spot in this year’s Asian rankings after having been overtaken by a host of Japanese cities, including Tokyo, Yokohama, Nagoya and Osaka.
Ye t , t h i s d o e s n’ t n e c e s - sarily mean that goods and services are now cheaper in the SAR compared with a year ago. The city’s inflation rate, in fact, posted a 3-percent growth year-on-year in 2016, according to Lee Quane, regional director for Asia at ECA International.
In s t e a d , e x c h a n g e - r a t e movements have much to do with Hong Kong’s fall in the regional and global rankings in terms of living costs for expats.
A strengthening Japanese yen, in particular, has enabled Tokyo to reclaim its crown as the most costly city in Asia and worldwide, and pushed all other surveyed Japanese cities above Hong Kong in the rankings.
Likewise, a weakening yuan on the Chinese mainland and a relatively stronger Hong Kong dollar have made Hong Kong the most expensive city in China, dwarfing its peers like Beijing, Shanghai, Macao and Taipei.
“A l t h o u g h t h e C h i n e s e mainland saw the biggest drops in the Asian rankings, it does not truly follow the general trend seen there over the past five years, during which mainland cities produced an average increase of 88 places in the global rankings. It’s likely that major mainland cities will remain expensive destinations for mobile employees for the foreseeable future,” said Quane.
So far, the Asia Pacific has been home to half of the 20 most costly cities around the world — more than any of the other regions worldwide, including Central Asia, Middle East, Africa and Europe.
As for Hong Kong, despite the fall in the rankings, the financial center is still more expensive than other major international financial hubs like London, New York and Sydney.
A 500ml beer at a bar in Hong Kong costs $12.29, but it costs only $8.71 in London, while a liter of petrol costs on average $2.02 in Hong Kong and $0.83 in New York.
Looking ahead, Quane believes that major cities in the Asia Pacific will continue to be more costly, and rising living costs for expats may deter multinationals from sending their talents to the region as a whole.
But, for the moment, he noted that Hong Kong’s regional competitiveness continues to be threatened. A weaker yuan may not immediately translate into an attraction for companies intending to relocate their employees from Hong Kong to the mainland.
He said the SAR still retains its allure for multinational corporations, banking on its free economy and a mature market with a global horizon.
The SAR still retains its allure for multinational corporations, banking on its free economy and a mature market with a global horizon.”
A survey shows Hong Kong has slipped to the fifth spot in the rankings among the most expensive cities in Asia this year. But a weakening yuan and a relatively stronger Hong Kong dollar have made Hong Kong the most expensive city in China, dwarfing its peers like Beijing, Shanghai, Macao and Taipei.
Lee Quane, regional director for Asia at ECA International