Hong Kong has surpassed Singapore to become the eighth most expensive city in Asia for an expatriate worker to live in, a new cost of living report has found.
The ranks of the two were inverted last year and the last time Hong Kong was more expensive than the city-state was in 2010.
Human resources consultancy ECA International attributed Hong Kong’s overtaking of Singapore to the latter’s currency weakening against the US dollar, to which the Hong Kong dollar is pegged.
The Hong Kong dollar has appreciated three to four per cent against the Singapore dollar in the last 12 months, the report said.
Globally, Hong Kong punched in at No 28 on the index, which surveys about 400 locations worldwide, twice a year.
Singapore dropped one place to 30 in the world rankings, while Shanghai and Beijing both climbed significantly from 25 to 18, and 21 to 15 respectively.
Fuelled by an appreciating Renminbi, rising food and oil prices, Beijing is now the second most expensive city for expats in Asia, behind Tokyo.
“Chinese cities are getting progressively more expensive,” said ECA regional director for Asia Lee Quane. “Living costs in Shenzhen for example, have been rising much faster than in Hong Kong in the last year.”
The company determines a city’s average cost of living based on a selected basket of goods and services – in dollar terms – commonly purchased by expats.
These include groceries, dairy products, alcohol, clothing, restaurant meals and tobacco. Accommodation costs are not included in the survey as they are likely to be addressed separately by an expatriate’s employer.
“If we were to include such costs, Hong Kong and Tokyo would be higher in the ranking, while Beijing would be significantly cheaper due to lower housing costs,” said Quane.
The survey helps employers calculate allowance costs for overseas employees and ensure their spending power is not compromised.
Quane said the city’s position remained stable due to slower inflation.
“Hong Kong will not overtake Tokyo any time soon. A higher cost of living will not impact the city’s competitiveness, but it could affect its attractiveness in the eyes of multinational companies.”