Four of the top 10 most expensive cities for expatriates are in Asia, according to Mercer’s 2014 Cost of Living Survey.
The most expensive city, Hong Kong (3), jumped three places from last year. Singapore (4) is the next most expensive city in the region, gaining one position from last year, followed by Tokyo, which ranked 7 dropping four places this year.
Jumping four spots since last year, Shanghai (10) is the next Asian city on the list, followed by Beijing (11), Seoul (14), and Shenzhen (17).
“Japanese cities have dropped in the ranking this year as a result of the yen’s weakening against the US dollar,” said Ms. Constantin-Métral. “However, Chinese cities jumped in the ranking, including Shanghai, Beijing, and Shenzhen, due to the strengthening of the Chinese yuan.”
Australian cities have witnessed some of the most dramatic falls in the ranking this year as the local currency has depreciated against the US dollar.
Sydney (26), Australia’s most expensive ranked city for expatriates, and Melbourne (33) dropped seventeen places while Perth (37) fell nineteen spots. Mumbai (140) is India’s most expensive city, followed by New Delhi (157) and Chennai (185). Bangalore (196) and Kolkata (205) are the least expensive Indian cities ranked.
Elsewhere in Asia, Bangkok (88) dropped twenty-two places from last year. Kuala Lumpur, Malaysia, ranks 115, followed by Indonesia’s Jakarta which ranked 119, falling forty-eight places from 2013.
Hanoi jumped three spots to rank 131. Karachi, Pakistan (211) remains the region’s least expensive city for expatriates.
World's most expensive cities
Two African cities top the list of most expensive cities for expatriates according to this year's ranking. Although not typically recognized as wealthy cities compared to others, Luanda in Angola is the world’s most expensive city for the second year in a row followed by N’Djamena, Chad.
Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Bern, Moscow, and Shanghai.
Karachi, ranked 211, is the world’s least expensive city for expatriates, and the survey found that Luanda is more than three times as costly as Karachi.
Currency fluctuations and the impact of inflation on goods and services haveinfluenced the cost of expatriate programs as well as the city rankings.
“While multinationals continue to recognize the importance of having a global workforce and corporate assignments remain prevalent, they must be able to monitor and balance the cost of their expatriate programs," says Ed Hannibal, Partner and Global Leader for Mercer’s Mobility practice.
Hannibal notes that employers need to evaluate the impact of currency fluctuations, inflation, and political instability when sending employees on overseas assignments while ensuring they retain talented employees by offering competitive compensation packages.