08 June 2017. The cost of living for expatriates here has fallen below that of many Asian cities, such as Hong Kong, Tokyo and Seoul, according to consultancy ECA International> Singapore tumbled six places from 18th last year to become the 24th most expensive location for expats worldwide, the report out yesterday noted.
It is the first time the country has fallen out of the top 20 global ranking since 2014, when it came in at 31st.
The survey tracks a basket of day-to-day goods and services, including food, household items, general services and necessities, but excludes costs such as rental, utilities, car purchases and school fees.
Despite the decline in the ranking, prices here had actually gone up in local currency terms in the past year. But the increase was mitigated by foreign currency movements as the Singapore dollar had weakened against the United States dollar, said ECA International, which tracks 460 cities twice a year.
“As the Singapore dollar has depreciated against many currencies over the course of the last year, this has made the cost of living cheaper relative to several other locations than it was a year ago,” noted regional director Lee Quane.
The most expensive city in the world for expats is Angolan capital Luanda, which rose from eighth last year to top spot as the overvalued Angolan currency drove up the cost of goods, the consultancy said. Hong Kong rose seven places to second on the global rankings, with the Swiss cities of Zurich, Geneva, Basel and Bern taking the next four spots. Tokyo was seventh, Seoul eighth, then Venezuelan capital Caracas, with Khartoum in Sudan wrapping up the global top 10.
ECA International found that currency fluctuations had a heavy influence on how the cities lined up – evident in the slump in rankings for Kuala Lumpur and London. Malaysia’s capital slipped 15 places from last year to 212th position due to the continued weakness of the ringgit. Central London, meanwhile, fell 67 spots to 132nd after the British pound plunged following the Brexit vote last June. The report noted that London is now cheaper than not only European rivals Paris, Berlin and Brussels, but also Bangkok, Rio de Janeiro and Buenos Aires.
Within the Asia-Pacific, Singapore retained its position as the 10th most expensive city, with Hong Kong, Tokyo, Seoul, Shanghai and Yokohama in the top five. Hong Kong pipped Tokyo as the priciest city for expats in the region, up one spot from last year’s survey.
Mr Quane said: “Hong Kong has continued to get more expensive for expatriates. Over the past few years, the Hong Kong dollar has appreciated against most major currencies, owing to its peg to the US dollar, which has pushed up the price of goods and services.”
Tokyo’s dip in the rankings was attributed to the weaker yen amid stable prices over the past year.
Kaohsiung in Taiwan moved up the most number of places in the region – from 31st to 18th – thanks to the appreciation of the New Taiwan dollar.
“For companies that send staff to Taiwan and provide cost of living allowances to protect their purchasing power, they will likely need to increase them to ensure that their employees’ buying power remains protected,” Mr Quane said.
Ulaanbaatar in Mongolia remained the cheapest location in the Asia-Pacific, followed by cities in Malaysia and Myanmar, the report noted.