What city is the most expensive for British ex-pats?
Luanda has returned to the top of ECA’s global rankings this year, as the most expensive location for British expatriates to live in.
The Angolan capital has been consistently in the top five most expensive cities since 2012.
This was one of the findings in the latest cost of living survey published by ECA International, a specialist provider of knowledge, information and software for the management and assignment of employees around the world.
Steven Kilfedder, Production Manager, ECA International commented: “The cost of goods typically purchased by international assignees in Luanda, which was already high due to poor infrastructure and high oil-fuelled demand, continues to be pushed even higher.
“The Angolan kwanza is increasingly overvalued, which pushes up relative costs; while the ongoing weakness of the black-market exchange rate has also inflated the price of imported goods.”
ECA International has been conducting research into cost of living for over 45 years.
It carries out two cost of living surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is not compromised while on international assignment.
The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in 470 locations worldwide.
Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.
Khartoum, Sudan, is up to second place on the list of most expensive cities and has risen by 224 places in just five years, as currency shortages and rising prices continue to take effect on the African nation.
Asian cities dominate the top of the table
Asian cities lead the way as the most expensive locations to live in, with over half of the top 50 most expensive locations surveyed this year being in Asia.
A total of 26 of the top 50 entries were Asian cities, with 14 Chinese cities alone featured on the list. This compares with just four EU cities and three US making it into the top 50.
In Japan, Tokyo has fallen seven places and relinquished the global top spot in the process – falling to eighth in the table.
Despite this, Tokyo remains the most expensive location for expatriates in the Asia-Pacific region. Other Japanese cities have performed similarly – with Yokohama, Nagoya and Osaka all dropping out of the top ten.
Lee Quane, Regional Director – Asia, ECA International, said, “Japanese cities have dropped in the rankings as the yen has weakened in the last year. However, with four cities in the global top 20 Japan is still an expensive place for expatriates.”
Taiwanese cities on the other hand continue to rise through the rankings with Taipei and Kaohsiung 33rd and 45th respectively.
This is a dramatic rise when compared with five years ago when Taipei was ranked 66th most expensive location and Kaohsiung wasn’t even in the top 100.
Singapore has fallen in the rankings and is now the 21st most expensive city surveyed. This is the first time since 2014 that Singapore has not featured in the top 20.
Asia is also home to some of the cheapest locations in the ranking table, with Ulaanbaatar claiming the status as Asia’s cheapest location.
Quane added: “This highlights the curiosity of managing the movement of people in Asia for many companies and their HR departments. Asia is home to some of the world’s most expensive locations as well its cheapest. This level of variety is only matched in Africa which is home to both the world’s most expensive location and its cheapest.”
Ulaanbaatar is joined by Johor Bahru, George Town (Penang), Yangon and Karachi in making up the cheapest locations in Asia, with all of these locations falling in our global rankings over the past 12 months.
Elsewhere in Asia, the newly introduced GST tax in India seems to have had little impact on the cost of living in Indian cities. All Indian locations that were surveyed have risen slightly from their positions in the 2016 survey, but the highest-placed remains New Delhi in 166th.
Quane said: “When a new tax is introduced prices do not always rise overnight. The introduction of national goods and services tax in India to replace a range of central and state taxes seems to have had little impact on the costs overall.”
US cities fall in first year of new presidency
The election of President Trump has coincided with a drop for all US cities featured in the cost of living rankings, as costs fall for overseas workers.
The cities of Dallas and Philadelphia saw the sharpest drops, both falling 36 places, while Los Angeles (61st) and San Francisco (63rd) have both dropped out of the top 50 most expensive cities in the world.
Steven Kilfedder added: “US cities have dropped in the rankings due to the fall in the value of the dollar and the thriving euro, meaning US cities have been overtaken in the table by many in the Eurozone.
“After initially rising following Trump’s election, the US dollar has fallen as his administration has stumbled. We could see this trend reversed next year if President Trump’s tax bill is passed, as long as money moves back into the country and interest rate rises become more likely.”
UK falls as Europe rises
The survey confirms London has the lowest ranking of any G7 capital and that the UK is one of the cheapest countries in Western Europe, behind Italy, Germany and France.
UK locations featured in the Cost of Living Index include Central London, Outer London, Edinburgh, Manchester, Cardiff, Glasgow and Belfast, all of which have fallen in ranking in the past year, whereas many cities throughout Europe have risen.
Kilfedder summarised: “The UK and mainland Europe are going in very different directions in terms of rankings as the UK struggles with higher inflation and a weak pound while the euro has strengthened.
“Although doing business in the UK is now cheaper for overseas companies, the current situation will make it harder for UK companies to expand, invest and move people abroad.”