Meanwhile, Bangkok takes the 106th position, and Mumbai follows in 127th. Additionally, several cities featuring in the global top 20 comprise those in Japan, Mainland China, and South Korea.
Employers who are looking to send talents to work abroad might want to avoid the Asia region. According to Mercer's latest Cost of Living 2022 survey, Asian cities dominate the world’s most expensive city rankings with Hong Kong taking the top spot as the costliest place amongst 227 cities — ahead of Zurich, Tel Aviv, and New York.
Hong Kong also ranks ahead of Asian counterparts such as Singapore (8th), Tokyo (9th), Beijing (10th), and Seoul (14th).
With regard to cities in Malaysia, Thailand, Indonesia, and Vietnam, the rankings are as follows:
- Kuala Lumpur, Malaysia (181st)
- Johor Bahru, Malaysia (211th)
- Bangkok, Thailand (106th)
- Jakarta (151st), Indonesia
- Hanoi, Vietnam (150th)
- Ho Chi Minh City, Vietnam (163rd).
With that in mind, Bangkok is the second most expensive in Southeast Asia after Singapore, which analysts attributed to a "stronger Thai baht". Meanwhile, Johor Bahru is ranked as the least expensive city in the region.
Over in India, Mumbai takes the 127th position, New Delhi 155th, Chennai 177th, Bengaluru 178th, Hyderabad 192nd, Pune 201st, and Kolkata 203rd.
Commenting on the findings, Tracey Ma, Regional Mobility Leader, Asia Pacific explained: "Despite the relatively lower inflation in Asia compared to the rest of the world, high prices and strong currencies with the exception of Japan and Korea, continue to propel Asia as one of the most expensive regions for international employees.
"In the past months, the strength of the Chinese Yuan has also made Mainland China pricier to live in. Six of the main cities – Beijing, Shanghai, Shenzhen, Guangzhou, Qingdao, and Nanjing – are among the top 10 most expensive cities in Asia. In contrast, Japanese and Korean cities have become relatively more affordable due to a weaker Japanese yen and Korean won."
She added that economic and political uncertainties have pushed prices upwards and caused significant increases in the cost of living, even in developed and stable markets across Asia. "While the onus is on employers to act quickly to attract and retain key talent, they need reliable data and clear strategies to navigate mobility packages in times of uncertainty. This will help to ensure their employees’ financial wellbeing as well as business efficiency and equity".
Beyond the rankings
In addition to the cost of living data, analysts discovered that the impact of COVID-19, the crisis in Ukraine, and the exchange rate variations and widespread inflation are having "a material impact" on employees’ pay and savings. "This can have serious consequences for employers in the global battle for talent," they said.
Against this backdrop, more companies are adopting the local-plus compensation approach to pay their foreign employees, and mobility programmes are increasingly being utilised as tools for companies to develop their high potential talent, rather than support mechanisms to make up for talent shortages in certain areas within the organisation, the analysts shared.
Further, analysts observed a significant decrease of inbound international assignments into Asia in the past 18 months - talent shortages, especially for highly-skilled IT professionals, have become "an issue for some countries", with the rapid adoption of technology and digitalisation.
Rankings in the other regions
Europe: Four European cities are among the top 10 most expensive locations. All of those four are based in Switzerland, and Zurich ranks second globally, closely followed by Geneva (3rd) and Basel (4th).
The other cities ranked in Europe are Copenhagen, Denmark (11th), London, United Kingdom (15th), Vienna, Austria (21st), and Amsterdam, Netherlands (25th).
Overall, the most expensive city in Eastern Europe is Prague, Czech Republic (60th), and it is followed by Riga, Latvia (79th), Bratislava, Slovakia (105th), and Tallinn, Estonia (140th). On the other hand, the least expensive city in Eastern Europe is Sarajevo, Bosnia-Herzegovina (209th).
The Americas: New York City (7th) remains the most expensive city in the region, followed by Nassau, Bahamas (16th). The remaining US cities are ranked between 17th place and 112th place: Los Angeles (17th), San Francisco (19th), Honolulu (20th), Washington (29th), Chicago (36th), and Cleveland (112th). The most expensive Canadian city is Toronto (89th), followed by Vancouver (108th), Montreal (125th), Ottawa (132nd).
Meanwhile, the least expensive city is Calgary (141st).
Pacific: The most expensive city in the Pacific region is Noumea, New Caledonia (54th), closely followed by Sydney, Australia (58th). Auckland, New Zealand (95th) is the most expensive city in New Zealand, while Wellington (120th) is the least expensive in the Pacific.
The cost of living is assessed through evaluating more than 200 goods and services (from housing to transportation, utilities, food, and personal care), as well as essential factors such as currency fluctuations, cost inflation, and accommodation price instability.
Image / Mercer