Staff assigned for work in Asian major locations are affected by rising costs of living mainly due to the strengthening of Asian currencies.

Tokyo, Japan remains as the most expensive location in Asia due to a stronger Yen against other major currencies. Other cities in Japan that are ranked in the top ten most expensive cities in Asia are Nagoya, Yokohama, Kobe and Beijing.

Joining the Japanese cities in the top ten are the Chinese cities of Beijing, Shanghai, Hong Kong, Shenzhen and Guangzhou.

"The strengthening of Asian currencies is the dominant factor contributing to the region being more expensive for visitors than it was 12 months ago," explains Lee Quane, Regional Director – Asia, ECA International. "In that period, the yuan has continued to strengthen while the yen has appreciated by almost 8% against the US dollar. Many Western currencies, including sterling, the euro and the Swiss franc, have weakened. As a result, people coming from these economies into Asia will notice a considerable difference in costs compared with 12 months ago."

Singapore, Malaysia and Hong Kong

Singapore is ranked at number 10 within the region despite its weakened currency.

According to Quane, "Price rises have not slowed down as much in Singapore as in other parts of Asia. Our data show that while the prices of goods and services in China and Malaysia have increased at half last year’s pace, in Singapore this rate is down by just 25%. Furthermore, currencies of locations previously more expensive than Singapore, notably London, Stockholm and Istanbul, have depreciated at an even faster rate than the Singapore dollar. These factors have contributed to Singapore becoming more expensive for visitors than many of the other locations in the survey."

The rebound of the US dollar against many major currencies also means that the cost of living in countries where the currency is linked to the dollar has risen. Hong Kong jumped from 98th the 29th position in the ranking.

"The effect of inflation in Hong Kong this year has been more moderate than last year. The major reason behind Hong Kong becoming more expensive for assignees is due to the strengthening of the US dollar over the year," explains Quane. "Companies sending staff into Hong Kong and paying them in their home currency are likely to have seen the purchasing power of their staff adversely affected. On the flip side, this means that it is now cheaper for Hong Kong companies to send staff to most locations worldwide in comparison with 12 months ago."

Not all Asian currencies have strengthened. The falling Korean won has seen Seoul, the region’s most expensive location two years ago, fall to 17th position. The same goes for Malaysia, as the depreciation of the ringgit has made cost of living cheaper in the country for expats. The Thai baht, Indonesian rupiah and Taiwanese dollar have all depreciated against the US dollar in recent months too.

The cheapest city to live in Asia is the Mongolian capital, Ulaanbaatar, with the prices of goods and services about a third of the cost there than when purchased in Tokyo.

Besides currency fluctuation, falling inflation in many countries and the collapse of petrol prices last year also played a role in cost of living ranking movements.

Out of Asia

Copenhagen replaces Oslo as the region’s most costly location for assignees in Europe while Manhattan is the most expensive for North American locations. Port of Spain in Trinidad and Tobago has pipped Rio de Janeiro as the most expensive for South America.

Meanwhile, Sydney and Canberra are Australia’s most expensive locations for the Australasia region. It has to be pointed out though that the depreciation of both the Australian and New Zealand currencies against the US dollar has made the costs of living there cheaper for visitors in comparison with last year.

The world’s most expensive city to live in for foreigners is Luanda, the capital city of Angola.

About ECA’s Cost of Living survey

Used to help multinational companies calculate expatriate salaries, the survey is done twice a year comparing a basket or commonly purchased consumer goods and services. The survey is done over 370 locations worldwide.