Asian and European cities most expensive for expats

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Asian and European cities, particuarly Hong Kong, Zurich and Singapore, are among the most expensive cities for expatriate employees working abroad, according to research by Mercer.

Its 21st annual Cost of living survey, published in June 2015, named Luanda, the capital of Angola, as the costliest city for expats for the third consecutive year.

The research, which covers 207 cities across five continents, measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. 

Zurich, Switzerland, is the most expensive European city for employees working abroad, and was ranked third on the list.

Asain cities Hong Kong and Singapore ranked second and fourth, respectively.

Other cities in the top ten included:

  • Shanghai, China (6).
  • Beijing, China (7).
  • Seoul, South Korea (8).
  • Bern, Switzerland (9).
  • N’Djamena, Chad (10).

The research found that foreign exchange costs create headwinds for many multinational organisations, while currency fluctuations are contributing to the cost of expatriate packages.

It also found that factors such as the instability of housing markets and inflation for goods and services, significantly impact the overall cost of doing business in a global environment. 

In the UK, London was ranked 12th on the list, Birmingham at 80, Aberdeen at 82, Glasgow at 109 and Belfast at 127.

Llya Bonic, senior partner and president of Mercer’s talent business, said: “As the global economy has become increasingly interconnected, close to 75% of multinational organisations are expecting long-term expatriate assignments to remain stable or increase over the next two years to address business needs.

“Sending employees abroad is necessary to compete in markets and for critical talent, and employers need a reliable and accurate reflection of the cost to their bottom line.”  

Kate Fitzpatrick, senior international mobility consultant at Mercer, added: “UK cities have either increased or remained stable in the ranking, with the exception of Belfast.

“While the pound has weakened 8% against the US dollar over the last 12 months, something that would usually push cities down in the ranking, a number of other currencies including the Euro have dropped even more, pushing UK cities up.

“In addition, London remains high because of the continued increase in rental accommodation costs which has offset the drop in currency. Birmingham and Aberdeen have experienced a moderate increase in the price of goods and services, while Glasgow remained stable due to moderate price increases and despite a decrease in housing costs. Belfast has dropped seven places due to a decrease in rental accommodation costs.”