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David Evans

Hong Kong is the world's fifth-most expensive city to live in, and has the world's second-most expensive housing after London, according to a government survey.

 But the results show it has become one of the cheaper major cities because of the deflation of the past 18 months.

 Hong Kong ranked fifth when housing costs were included, behind Tokyo, London, New York and Singapore.

 It was placed above Taipei and Shanghai.

 But by housing alone, it was second-most expensive after London.

 The survey, commissioned by government economist Tang Kwong-yiu, ranked Hong Kong seventh-most expensive city in the world for expatriates, excluding housing costs.

 'The price adjustment has worked and the cost of living has fallen,' said Maureen Siu, the Government's Business and Services Promotion Unit's assistant director.

 As at last month, excluding the cost of housing, Tokyo was the most expensive city in the world, followed by New York, London, Singapore, Taipei and Shanghai.

 The survey was done on the Government's behalf by a 'reputable international company' Ms Siu said.

 'We are the first to want to see how Hong Kong has adjusted.'  Martin Barrow, a Jardine Matheson director and chairman of Hong Kong General Chamber of Commerce's economic panel, said previous independent surveys had exaggerated Hong Kong's costs by focusing on expensive rents, restaurants, clothing and other shopping.

 'We are always selling ourselves short,' he said, of the 'rather good news'.

 Ian Perkin, the chamber's chief economist at said the results were not surprising, given the deflation in consumer and asset prices.

 'I've heard lots of complaints about the cost of living in Shanghai and the quality of housing there,' he said.

 The study was weighted using spending habits of a typical United States expatriate household.

 Hong Kong was graded seventh-most expensive for food, alcohol and tobacco, durable goods and transport.

 It ranked third for utilities, and fifth for clothing and footwear.

  For the typical expenditure of a local family, the Government found Hong Kong ranked the fourth-most expensive place to live.

COSTS 



Deflation takes pressure off but burdens remain high