Hong Kong Steals Tokyo's Crown as Priciest Asian City for Expats

(Bloomberg) -- Hong Kong overtook Tokyo as the most expensive city in Asia-Pacific for expatriates, and is second globally, according to consultancy firm ECA International. Thanks to the pound, London is now cheaper than Bangkok.

Hong Kong climbed to its highest position ever on the rankings. Tokyo maintained its No. 7 spot globally while Singapore fell to 24th place. London, at 132nd, is now cheaper than Thailand's capital, Rio de Janeiro and Buenos Aires. Luanda in oil-rich Angola climbed to the top spot.

“Over the past few years, the Hong Kong dollar has appreciated against most major currencies, owing to its peg to the U.S. dollar, which has pushed up the price of goods and services relative to those in locations whose currencies have weakened against the greenback,” Lee Quane, a regional director for Asia with ECA, said in a statement Wednesday. 

While local prices have risen in Singapore, the city state's currency has weakened against counterparts over the past 12 months making relative costs cheaper than a year ago, Quane said. For Luanda, goods' costs -- already high due to poor infrastructure -- have risen as the Angolan kwanza becomes increasingly overvalued.

Click here to read ECA's December report

ECA conducts two surveys a year to help companies calculate cost-of-living allowances for expat employees. The surveys compare a basket of like-for-like goods and services bought from more than 460 locations worldwide, according to the company. The survey doesn't include rent, utilities, car purchases and school fees, which are tracked separately.

“Much of the movement in the rankings amongst Asian locations in the past 12 months has been strongly influenced by currency movements, with Yangon falling in the regional rankings on account of depreciation of its currency in the past year,” said Quane.

An ECA survey published in May also found the value of expat pay and benefits packages continued to decline last year in both Hong Kong and Singapore. A package for a middle manager in Hong Kong, including salary, tax and benefits, has fallen 2 percent in U.S. dollar terms over the past five years to around $265,500, while the typical package in Singapore dropped 6 percent to $235,500.

To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Nasreen Seria at nseria@bloomberg.net, Karl Lester M. Yap, Emma O'Brien