A street cleaner works on a promenade next to Victoria Harbour during a day of heavy rain in Hong Kong on Wednesday. (AFP photo)
HONG KONG: Hong Kong has retained its title as the world’s most expensive city for expatriates to live in for the third year running, with the firm behind the rankings saying the city’s high cost of living combined with tough coronavirus policies have pushed foreign workers to choose Singapore and Dubai instead.
Rounding out the top five in the cost-of-living survey, released by human capital firm ECA International on Tuesday, were New York, Geneva, London and Tokyo.
Asian cities accounted for half of this year’s top 10 most expensive cities for expatriates. Shanghai and Guangzhou were two of the highest-ranked mainland China cities, at eighth and ninth respectively. South Korean capital Seoul was placed No 10.
Lee Quane, ECA International’s regional director for Asia, said: “Although Hong Kong has been impacted by rising global inflation less than other regional and global locations in the past year, it nonetheless remains the most expensive location in the world.”
ECA calculated its own inflation rate based on a basket of everyday goods and services, and found that prices in Hong Kong, driven by fuel costs, had risen by 3% year on year as of March. This was lower than the global average of 5.8%.
But the continued strength of the Hong Kong dollar – which is pegged to the US dollar – while other currencies weakened has contributed to the high cost of living in the city.
According to the Census and Statistics Department, the city’s official inflation rate stood at 1.6% year on year as of April.
The biannual survey compared data compiled in March 2021 and March 2022, and took the cost of food, household goods, recreational goods and services, clothing, meals out, alcohol and tobacco into account. The cost of rental accommodation, utilities and transport was also considered.
Quane noted that rental costs in particular were also rising in Singapore, driven by the number of people relocating or returning home to the city state. But Hong Kong’s regional rival kept its place at No 13 despite the significant price increases, including in areas such as utilities and petrol.
Hong Kong, meanwhile, had become less attractive for expatriates, he said, adding that the city’s management of the coronavirus pandemic had played a pivotal role. While cities such as Singapore had largely lifted travel restrictions and mandatory rules for mask-wearing outdoors, Hong Kong kept tough social-distancing and travel curbs in place.
“That is what I think is the biggest factor, which is either deterring people from coming or making people consider their options and go elsewhere,” Quane said.
He said the firm was seeing a talent outflow, with Western expatriates from places such as Europe, North America and Australia either returning to their home countries or going to other destinations. Singapore and Dubai, in particular, were benefiting from the exodus.
“From an employer’s perspective, if Hong Kong is becoming less attractive, but still expensive, it means that companies obviously have to pay a lot to encourage people to relocate to Hong Kong,” he added.
The ECA survey has been conducted in March and September every year since 2005.