According to a recent survey conducted by global consulting firm Mercer, Hong Kong retains its position as the most expensive city for expatriates. Singapore, on the other hand, has surged to the second spot in the rankings. The survey provides insights into the cost of living for expats worldwide and highlights the factors contributing to the rise in Singapore's ranking.

Hong Kong's Continued Dominance

Hong Kong has once again topped Mercer's cost of living survey, holding onto its first-place ranking for the second consecutive year. The city's high living expenses can be attributed to various factors, including soaring housing prices and overall inflation rates. However, it is worth noting that housing costs in Hong Kong have seen a decline, which experts attribute to a slower population growth and increasing mortgage interest rates.

Singapore's Rapid Ascent

Singapore has witnessed a remarkable ascent in the rankings, climbing six places to secure the second position. The primary drivers behind Singapore's rise are its robust currency position and the high inflation caused by disruptions in the global supply chain and escalating fuel costs. Tracey Ma, Mercer's regional mobility leader for Asia-Pacific, emphasized these factors as significant contributors to Singapore's increased cost of living for expats.

Comparison with Other Surveys

While Mercer's survey places Hong Kong as the costliest city for expats, another recent study by human capital firm ECA International ranked Hong Kong second, with New York taking the top spot. However, both surveys agree on Singapore's notable rise in the rankings. ECA International's report attributed New York's soaring rent prices to people returning after the pandemic, while Singapore faced accommodation supply constraints unable to meet the rising demand.

Regional Trends: Mainland China and Japan

Mercer's survey revealed an interesting trend for mainland Chinese and Japanese cities. Beijing and Tokyo, which were previously in the top 10, dropped to 13th and 19th places, respectively. This shift can be attributed to slower consumer demand and weaker currency positions against the US dollar. Furthermore, Japan has experienced low domestic consumption, affecting its recovery from the pandemic. Similar downward trends were observed for cities in mainland China, primarily due to a shrinking housing market and decreasing demand for rental properties.

Global Rankings and Outlook

Globally, Copenhagen in Denmark secured the 9th position, while New York topped the North American rankings, placing 6th overall. Tel Aviv, Israel, emerged as the most expensive city in the Middle East, ranking 8th globally. Mercer's report also predicted sluggish income growth and increased unemployment due to aggressive national monetary policies and tightening global financial conditions in 2023.

The Covid-19 pandemic has compelled employers worldwide to reassess their priorities, particularly in terms of work-life balance and city preferences for their distributed workforce. Remote work experiences during the pandemic have prompted employers to rethink their strategies, taking into account factors such as quality of life and employee well-being.

The Cost of Living in Hong Kong and Singapore

In a recent survey conducted by Swiss private bank Julius Baer, the cost of "living well" in various cities was analyzed, resulting in a ranking of the most expensive cities for expatriates. This updated study provides valuable insights into the changing economic landscapes of Hong Kong and Singapore, shedding light on the cost factors that contribute to their rankings.

Singapore Takes the Lead

The latest report reveals that Singapore has emerged as the top-ranking city for expats in terms of living costs. The city-state's elevated position can be attributed to several factors. Singapore experienced a surge in costs for fine dining, premium whisky, business class flights, and car prices, surpassing regional averages. The early reopening of Singapore's borders after the pandemic induced an influx of newcomers, subsequently driving up housing prices.

Shanghai Secures Second Place

Shanghai, despite its stringent Covid-19 measures, has secured the second spot in Julius Baer's rankings. The city's notable expenses include high-priced business class flights and indulgent tasting menu dinners. Despite the challenges posed by the pandemic, Shanghai has maintained its reputation as a city with a high cost of living.

Hong Kong Ranks Third

Hong Kong, previously known as the most expensive city for expats, has slipped to the third position in this year's survey. The return of tourists has led to increased prices for hotel suites and fine dining experiences, contributing to Hong Kong's relatively high cost of living. Furthermore, Hongkongers were found to be paying more for cars and legal services compared to the previous year, while the city's property prices have continued to be the highest in Asia.

Key Findings of the Julius Baer Report

• Singapore has overtaken Hong Kong to become the most expensive city for expats.
• Singapore's high living costs are attributed to expensive fine dining, premium whisky, business class flights, and car prices.
• Shanghai has secured the second spot due to its costly business class flights and high-priced tasting menu dinners.
• Hong Kong ranks third, with increased prices for hotel suites and fine dining experiences due to the return of tourists.
• Hongkongers face higher expenses for cars and legal services compared to the previous year.
• Hong Kong retains its position as the city with the highest property prices in Asia.

Overall, these surveys provide valuable insights into the cost of living for expats and highlight the dynamic nature of global cities in terms of affordability and quality of life.