The cost of being an expat just keeps going up
Updated: 2013-07-25 11:18
By Michael Barris in New York (China Daily)
Hong Kong has the world's highest housing costs for expatriate employees, according to a new survey by Mercer, a consulting unit of Marsh & McLennan Cos.
It costs $7,091.69 a month to rent a luxury two-bedroom unfurnished apartment in Hong Kong, according to Mercer's 2013 Cost of Living Survey, released Tuesday. That figure even surpasses the $6,500 it costs to rent a comparable apartment in Luanda, Angola's capital city, which Mercer ranked as the world's most expensive city for expats.
"Generally, housing costs in the top Tier 1 cities in [the Chinese mainland], such as Beijing and Shanghai, have been on the rise over the years," said Steve Nurney, who leads Mercer's New York-based US global mobility center of excellence. Housing prices figured more prominently in Hong Kong's rankings than food and clothing costs, he said.
The only Chinese city to make the top 10, Hong Kong trailed Luanda in the cost of renting a luxury three-bedroom unfurnished house for one month - $13,538.68 to $15,000, according to the survey.
Hong Kong moved up three rankings to sixth place in the latest survey.
Mercer examined 214 cities across five continents and tracked the cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.
It converted currencies to US dollars and compared the findings with New York, the most expensive US city.
Nurney said the survey is designed to help companies and governments figure out compensation packages for expatriate employees.
"The cost of expatriate housing is typically the biggest expense for employers," he said.
Currency exchange was less of a factor this year than in some others because the dollar's recent rally against world currencies has been relatively small, Nurney said. "The Hong Kong dollar is tied to the US dollar, and there is not much impact there," he said.
Switzerland, however, had three cities in the top 10 because the Swiss franc lately has been strong against the dollar, Nurney said.
Nathalie Constantin-Metral, a Mercer principal responsible for compiling the survey ranking, said that in Asia, "about half of the cities went down in the ranking - Japan especially - due to local currencies weakening against the dollar".
Overall, US cities "either remained stable in the ranking or have slightly increased due to the movement of the dollar against the majority of currencies worldwide," Constantin-Metral said.
The top 10 costliest cities for expatriates, according to the survey, are Luanda, Moscow, Tokyo, N'Djamena, Chad; Singapore, Hong Kong, Geneva, Zurich, Bern and Sydney.
Moscow followed Luanda because of high housing costs. A luxury two-bedroom unfurnished apartment rental for one month in Moscow is $4,600 a month - or 14 times more than in Karachi.
Barb Marder, Mercer's global mobility practice leader, said "despite being one of Africa's major oil producers, Angola is a relatively poor country yet expensive for expatriates since imported goods can be costly".
Additionally, finding secure living accommodations that meet expats' standards "can be challenging and quite costly", Marder said.
Mercer said prices ranged - widely - from $1.54 for a cup of coffee in Managua, to $8.29 for one in Moscow. The tab for a fast food hamburger in Kolkata - near Calcutta - was $3.62, compared with $13.49 for the same item in Caracas. A movie ticket cost $5.91 in Johannesburg, but $20.10 in London.
(China Daily USA 07/25/2013 page2)
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