Most expensive cities for employees working abroad: Hong Kong & Singapore rank top

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Within Southeast Asia, Bangkok came in second, while Manila ranked 133rd, Jakarta ranked 151st, Hanoi came in 156th, Kuala Lumpur took 180th spot, and more.

Hong Kong and Singapore are the world’s two most expensive cities for employees working abroad, according to Mercer’s 2023 Cost of Living survey.

In comparison to last year, Singapore jumped six spots, while Hong Kong retained its top spot.

The rankings also saw four of the top ten cities belonging Switzerland.  

Overall, the top 10 most expensive cities for employees working abroad are as follows:

1. Hong Kong
2. Singapore
3. Zurich, Switzerland
4. Geneva, Switzerland
5. Basel, Switzerland
6. New York, United States
7. Bern, Switzerland
8. Tel Aviv, Israel
9. Copenhagen, Denmark
10. Nassau, Bahamas

In this year’s ranking, 227 cities across five continents were surveyed, comparing the cost of over 200 items and rental accommodation in each location in March 2023.

In a press release on 20 June 2023 (Tuesday), Tracey Ma, Regional Mobility Leader, Asia Pacific, Mercer, explained that high inflation was widespread across the region in most key markets such as Singapore. Apart from local market position, the ranking also compared across different markets over a 12-month period. She accounts Singapore’s significant jump in rankings to its strong currency position, as well as high inflation caused by supply chain disruptions and rising fuel costs.

The survey further revealed that almost all the cities in Mainland China and Japan have dropped in their rankings by about 40 to 60 places. Some key factors which contributed to this change were relatively slower consumer demand, and a weaker currency position against the US Dollar. It also notes that the low domestic consumption Japan is facing has been affecting its recovery from the pandemic.

Asia highlights

Within Asia, all except nine out of 49 cities studied either retained or received lower rankings this year, including Beijing (13^th) and Tokyo (19^th), which were previously part of the top 10 in 2022, while the three cities with the highest drop in rankings are from Japan, namely Yokohama (-65 to 115^th), Nagoya (-62 to 113^rd) and Osaka (-56 to 93^rd).

In Mainland China, almost all locations placed lower on the ranking as compared to 2022, apart from Shanghai which kept its 12^th position. The shrinking housing market alongside the declining demand in rental properties could explain this trend. However, it is interesting that despite their overall drop in rankings, five of the top 10 most expensive cities in Asia still came from Mainland China, namely Shanghai, Beijing, Shenzhen, Guangzhou and Qingdao.

Narrowing down to Southeast Asia markets, Bangkok is the second most expensive city in the region after Singapore. Other cities featured in the ranking are Phnom Penh (132^nd), Manila (133^rd), Jakarta (151^st), Hanoi (156^th), Ho Chi Minh City (164^th), Bandar Seri Begawan (172^nd), Kuala Lumpur (180^th), Yangon (204^th), Vientiane (209^th), and Johor Bahru (212^th), as the least expensive cities in Southeast Asia.

Out of the 49 Asian cities that were part of this year’s survey, Pakistan cities Karachi (226^th) and Islamabad (227^th), are the least expensive places both in Asia and globally for international employees to live in.

Cost of living in 2023

Key factors that have shaped the global economy in 2022 will continue to exert an influence in 2023, the findings highlighted As governments have begun to recently introduce aggressive national monetary policies and the tighten global financial conditions, it is likely that economies experience slower income growth this year, alongside rising unemployment. Among many markets, debt levels remain high and core inflation has yet to peak in many markets. For employees who are internationally mobile, inflation and exchange-rate fluctuations directly impact their pay and savings.

Apart from that, with the rising popularity of remote working, many employees are reconsidering their priorities, assessing their work-life balance, and thinking about the city or country they have chosen to live in. The change in working arrangements since the pandemic has pushed many organisations to reimagine their work setups.

Many employers are having to rethink management of a globally distributed workforce, especially for those that operate in tight labour markets.

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