According to research conducted by Mercer, Hong Kong is now the most expensive place for foreign workers to live. Meanwhile, the weaker pound has helped make London more affordable for expats, according to the global survey.
The research examined the cost of 200 items in more than 375 cities. The cost of each city is determined by the economic standing of the country it resides in. It also takes in to consideration exchange rate fluctuations that alters the price of imported goods. Often, these are only accessible to wealthy expats.
The findings suggested that currency fluctuations and, the collapse in the price of oil, has reshuffled the results of previous years. International cities which have little upmarket housing and import goods tend to have increased living costs for expatriates.
For example, The Angolan capital of Luanda topped the list for the past three years. Luanda has always been expensive for expats due to an oil boom. The boom drew in a global workforce to a country with an average GDP of approximately $5,900 per head.
However, Luanda has been knocked from the top spot as tumbling oil prices took a toll on the country, leaving Hong Kong to take the title of world’s priciest destination for expats.
Alongside Hong Kong and Luanda, Zurich, Singapore and Tokyo took the remaining top five spots. London has fallen five places, from 12th to 17th. The weak pound against the dollar over the past year has made life in the city more affordable for expat workers.
Furthermore, in the UK, both Aberdeen and Birmingham have dropped rankings. Aberdeen has fallen seven places to 85, due to a slump in the oil industry. Birmingham ranked 80th last year, now settling at 96 for 2016.
Kate Fitzpatrick, Senior Mobility Consultant at Mercer, comments: “While most Western European cities have remained stable in this year’s rankings, UK cities have fallen. However, the drop is not as large as to be expected, with steep rental prices keeping UK cities up.”
The research by Mercer estimated the cost of a two-bedroom flat the most expensive in Hong Kong at roughly £4,754 per month. London came in at £3,200 per month, Beijing at £2,400 and Sydney, £1,840. This was based on properties “of international standards”.
Due to the lack of international neighbourhoods and upmarket housing in Luanda, an expat-appropriate apartment would cost somewhere in the religion of £4,678 per month.
For expats seeking affordable cities, South Africa is ideal. Both Johannesburg and Cape Town are cheap cities. A slump in the rand has made it cheaper, especially for workers paid in an alternative currency.
In Hong Kong, a cup of coffee in a major city would set expats back a staggering £5.45. In London, you could buy the same for £3.10. However, you could pick up a loaf of bread in Hong Kong for an affordable £1.69. Comparing this to £4.15 in Tokyo or £5.84 in New York is enough to make any expat wince.