ASIATODAY.ID, JAKARTA – Asia dominated the world’s most expensive city rankings, with Hong Kong SAR taking top spot as the costliest place for employees working abroad, in Mercer’s 2022 Cost of Living survey.
Four of the cities in the top 10 are located in Asia, including Hong Kong SAR, Singapore (8th), Tokyo (9th) and Beijing (10th). Four cities in Switzerland – Zurich, Geneva, Basel and Bern – ranked second to fifth respectively, along with Tel Aviv (6th) in Israel and New York (7th) in the United States rounded off the Top 10 list.
This year’s ranking includes 227 cities across five continents, comparing the cost of more than 200 items in each location in March 2022. To stay up-to-date with the spending patterns of the expatriate workforce, Mercer revamped its Cost of Living methodology this year with new items such as smartwatches, tablet computers and smartphones added to the basket and non-relevant items such as music CDs and video movie rentals removed.
Tracey Ma, Regional Mobility Leader, Asia Pacific, said, “Despite the relatively lower inflation in Asia compared to the rest of the world, high prices and strong currencies with the exception of Japan and Korea, continue to propel Asia as one of the most expensive regions for international employees.
“In the past months, the strength of the Chinese Yuan has also made Mainland China pricier to live in. Six of the main cities – Beijing, Shanghai, Shenzhen, Guangzhou, Qingdao and Nanjing – are among the top 10 most expensive cities in Asia. In contrast, Japanese and Korean cities have become relatively more affordable due to a weaker Japanese yen and Korean won.”
In recent years, exchange rate changes have had more effect on cost-of-living indexes than inflation. However, this is no longer the case in 2022 due to rising inflation in developed economies. As travel and international mobility resumes, companies now face the challenge of ensuring the spending power of mobile employees are not affected.
In addition to cost of living data, mobility research conducted by Mercer and the learnings from Mercer’s work with clients reflects that the impact of COVID-19, the crisis in Ukraine, exchange rate variations and widespread inflation are having a material impact employees’ pay and savings. This can have serious consequences for employers in the global battle for talent.
Ms Ma said, “International assignment patterns are evolving faster than before. With the rise of remote and flexible work, companies need to rethink their approach to managing a globally distributed workforce with an optimized mobility program which aligns with the business strategic planning and achieve both cost efficiency, compliance and talent attraction.
More companies are adopting the local-plus compensation approach to pay their foreign employees and increasingly, mobility programs are utilized as tools for companies to develop their high potential talent, rather than support mechanisms to make up for talent shortages in certain areas within the organization.”
“We’ve also observed a significant decrease of inbound international assignments into Asia in the past 18 months. Talent shortages, especially for highly-skilled IT professionals, have become an issue for some countries, with the rapid adoption of technology and digitalization.”
Asia Highlights
Higher prices coupled with a stronger Thai baht also made living in Bangkok (106) the second most expensive in Southeast Asia, after Singapore. Other cities in the ASEAN region include Manila (122), Phnom Penh (134), Hanoi (150), Jakarta (151), Vientiane (157), Ho Chi Minh City (163), Bandar Seri Begawan (179), Kuala Lumpur (181), Yangon (198) and Johor Bahru (211), the least expensive city in Southeast Asia.
Mercer 2022 Cost of Living City Ranking – India
In India, inflation and currency fluctuations were small but Mumbai (127) remains the most expensive city, followed by New Delhi (155), Chennai (177), Bengaluru (178), Hyderabad (192), Pune (201) and Kolkata (203), the cheapest city in India.
Of the 49 Asian cities that were included in this year’s survey, the city of Bishkek in Kyrgyzstan ranked in 226th place, is the least expensive place in Asia for international employees to live in.
Commenting on the longer-term impact on global mobility practices triggered by COVID-19 and the crisis in Ukraine, Ms Ma said, “The economic and political uncertainty pushed prices upwards and caused significant increases to the cost of living, even in developed and stable markets across Asia.
While the onus is on employers to act quickly to attract and retain key talent, they need reliable data and clear strategies to navigate mobility packages in times of uncertainty. This will help to ensure their employees’ financial wellbeing as well as business efficiency and equity.”
Rankings for Other Regions
Europe
Four European cities are among the top 10 list of most expensive locations. All of those four are based in Switzerland, and Zurich being ranked second within the global ranking, as being the costliest within the European cities, closely followed by Geneva (3rd) and Basel (4th). Other cities in Europe are Copenhagen, Denmark (11), London, United Kingdom (15), Vienna, Austria (21) and Amsterdam, The Netherlands (25).
The most expensive cities in Eastern Europe is Prague (Czech Republic) ranked 60th out 227 cities. It is followed by Riga, Latvia (79), Bratislava, Slovakia (105) and Tallinn, Estonia (140). The least expensive city in Eastern Europe is Sarajevo in Bosnia-Herzegovina ranked 209th.
Middle East and Africa
Tel Aviv (Israel) is the costliest city in the Middle East for international employees, ranked on the sixth position within the global ranking. The next in line for this region are cities from the United Arab Emirates, namely Dubai (31) and Abu Dhabi (61). Saudi cities such as Riyadh (103) and Jeddah (111) rank in the middle, closely followed by Amman, Jordan (115) and Manama, Bahrain (117).
In Africa, Bangui (23), Libreville, Gabon (24) and Victoria, Seychelles (38) are the three costliest cities. High in the ranking for this region we find also Djibouti (41), Kinshasa (53) and Lagos (55). The cheapest city in Africa is Tunis, Tunisia ranked 220th.
The Americas
New York City (7) remains the most expensive city in the region, followed by Nassau, Bahamas (16). The remaining US cities are ranked between 17th place and 112th place, Los Angeles (17), San Francisco (19), Honolulu (20), Washington (29), Chicago (36) and Cleveland (112).
The most expensive Canadian city is Toronto (89) followed by Vancouver (108), Montreal (125), Ottawa (132), and least expensive city in Canada is Calgary (141).
In South America, Buenos Aires, Argentina (114) is ranked as the most expensive city in region, followed by Montevideo, Uruguay (123), Santiago, Chile (130), Quito, Ecuador (156), Sao Paulo, Brazil (168). Belo Horizonte (210) is the least expensive city in South America. Managua (212) the capital of Nicaragua is the least expensive city in the Americas.
Pacific
The most expensive city in Pacific is Noumea, New Caledonia (54) closely followed by Sydney, Australia (58). Auckland, New Zealand (95) is the most expensive city in New Zealand, and Wellington (120) the least expensive in the Pacific. (AT Network)
Top 10 Most Expensive Cities & Worldwide Rankings 2022
Top 10 Most Expensive Cities
Rank Global Asia
1. HONG KONG SAR HONG KONG SAR
2. ZURICH SINGAPORE
3. GENEVA TOKYO
4. BASEL BEIJING
5. BERN SHANGHAI
6. TEL AVIV SHENZHEN
7. NEW YORK CITY SEOUL
8. SINGAPORE GUANGZHOU
9. TOKYO QINGDAO
10. BEIJING NANJING