Ravi Chandran
Singapore drops in global Cost of Living rankings, but remains among top 10 most expensive locations for expatriates
- Singapore is now the 8th most expensive location for expatriates in Asia, and 13th place globally
- Five of the top ten most expensive locations in the world are now in Asia, as Chinese cities climb in the rankings
- Tokyo overtakes New York to move into second place in the rankings
Singapore has dropped by one place to be in the 13th position in the global Cost of Living rankings, but remains in the top ten most expensive locations for expatriates to live and work in Asia.
This was one of the findings of the latest Cost of Living research published by ECA International, the world’s leading provider of knowledge, information and software for the management and assignment of employees around the world.
Lee Quane, Regional Director – Asia at ECA International said, “With prices in Singapore remaining stable over recent months, any changes in the costs for expatriates living and working in the country would be largely dependent on currency changes. Consequently, as the Singapore dollar has been weaker than the yuan in the last 12 months, this has caused Singapore to fall behind Shenzhen and Guangzhou in our global rankings.”
Asia Highlights
Hong Kong has once again been named as the most expensive location in the world for expatriates to live and work in.
Quane said, “Despite falling rental prices and the Hong Kong Dollar weakening against currencies such as the euro and yuan, the city has retained its spot as the most expensive location in the world for expatriates. While New York was a strong competitor to Hong Kong – having placed 2nd in last year’s global rankings – the struggling U.S. dollar allowed Hong Kong to retain its top spot among the global rankings, while bumping New York to 4th place.”
Meanwhile, the majority of Chinese cities rose in the latest rankings, with Guangzhou joining Shanghai in the global top ten for the first time. Shenzhen and Beijing are also placed among the top ten most expensive cities in Asia, and the top 20 globally.
Quane said, “The yuan enjoyed a strong year as the Chinese economy bounced back quickly from the pandemic, making most locations in the country more expensive for overseas workers as compared to previous years. The Pearl River Delta continues to be an attractive option for many international businesses, while Guangzhou and Shenzhen remain expensive for overseas workers due to high rental costs and the growing demand for property in these cities.”
Elsewhere, Thai and Vietnamese locations continue to fall in the rankings, as their tourism-dependent economies still seek to recover from the pandemic. Bangkok dropped 11 places to 34th position, while Hanoi fell 20 places to be the 115th most expensive location in the world – falling out of the global top 100.
“Cities that had typically experienced high levels of tourism and overseas visitors before the Covid-19 pandemic have sunk in the rankings since the start of 2020, as their economies continue to take a hit from the heavy restrictions imposed around international travel. These effects are reflected in the significantly weak baht and dong, as compared to the euro, as well as the low rental prices in properties primarily targeted at foreigners. As demand for these properties fall, Bangkok and Hanoi have thus seen rents drop over the past 18 months,” said Quane.
Global Highlights
U.S. locations fell in the global rankings after a tough spell for the U.S. dollar, with San Francisco falling out of the global top ten to be in 15th place, and New York dropping two places to be in 4th place.
Quane said, “The U.S. dollar has struggled against other major currencies in recent months, in part due to the large stimulus packages introduced by Presidents Trump and Biden. This has affected every U.S. city in our rankings, including New York – which has been overtaken by Tokyo and Geneva this year. Moreover, large U.S. cities like San Francisco, Chicago, and New York saw their city centre rental prices drop as people began to move away from the cities due to the rise in remote working during the pandemic.”
In contrast, Australian locations all performed significantly better in the latest rankings, as the country recovered strongly from a series of major Covid-19 lockdowns in some states. Sydney rose by 17 places to break into the global top 50, but Perth saw the biggest jump of any location in the rankings – surging up 51 places to reach 74th position globally.
“Australia has seen a significant rebound from this time last year, when many residents were experiencing strict lockdowns in the face of the Covid-19 pandemic. As these restrictions have eased, the Australian economy has rebounded well, following a strong demand for its commodity exports. This has strengthened the Australian dollar, which pushed all Australian cities up in the global rankings as the currency now goes further abroad. However, with the country still shut off to most overseas visitors, it has not been possible for many workers to experience these benefits,” said Quane.
Similarly, the vast majority of cities in the Eurozone and the UK moved up the global rankings amidst low levels of inflation, owing to strong currencies.
Quane explained, “The euro and pound both grew in strength as compared to the weaker U.S. dollar, as European economies rebounded after the easing of pandemic restrictions and subsiding of Brexit uncertainty. This has seen many cities across Europe rise in the rankings as compared to last year, as visitors will find it more expensive to buy the same goods and services in their home currencies. Vienna and Munich moved into the global top 50, while London climbed by one place to enter the top five most expensive locations for expatriates.”
On the other hand, Rio de Janeiro saw the biggest plunge in this year’s rankings – dropping 52 places to 163rd place, despite rising inflation levels. This can be attributed to the continued weakening of the Brazilian real amidst high Covid-19 rates in the country, as well as its historically low interest rates.
ECA International has been conducting research into cost of living for 50 years. It carries out two main surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is protected while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 480 locations worldwide. ECA’s accommodation data is also factored in, comparing rental costs in areas typically inhabited by expatriate staff in over 400 locations worldwide.
| Location | 2021 ranking | 2020 ranking |
|---|---|---|
| Hong Kong | 1 | 1 |
| Tokyo, Japan | 2 | 3 |
| Geneva, Switzerland | 3 | 4 |
| New York, USA | 4 | 2 |
| London, UK | 5 | 6 |
| Zurich, Switzerland | 6 | 7 |
| Tel Aviv, Israel | 7 | 5 |
| Seoul, Korea Republic | 8 | 9 |
| Shanghai, China | 9 | 10 |
| Guangzhou, China | 10 | 13 |
| Location | 2021 global ranking | 2020 global ranking |
|---|---|---|
| Hong Kong | 1 | 1 |
| Tokyo, Japan | 2 | 3 |
| Seoul, Korea Republic | 8 | 9 |
| Shanghai, China | 9 | 10 |
| Guangzhou, China | 10 | 13 |
| Yokohama, Japan | 11 | 11 |
| Shenzhen, China | 12 | 15 |
| Singapore | 13 | 12 |
| Beijing, China | 16 | 18 |
| Taipei, Taiwan | 21 | 29 |
Mr Paul Ho, chief officer at iCompareLoan, said: “A relatively high standard of living coupled with a vibrant economy, provided by political stability and a favorable investment environment are all factors which have contributed to more expatriates arriving and settling in the country.”
“But a weaker currency exchange rate can be both a boon and a bane for expatriates, especially if they have loans in foreign currency like Renminbi,” he added.
Expatriates cannot leave Singapore without paying up their loans in Singapore in full. If they do so, that can never set foot on the island again and would also face the prospect of being made a bankrupt in Singapore.
Being made a bankrupt in Singapore, is different than being made a bankrupt in the U.S. For example, in Singapore, you can be “made” bankrupt by a creditor, while in the U.S., although it seems like you are being forced into bankruptcy, you still have to make the decision to file for bankruptcy. And you can be made a bankrupt if you owe your lender just $10,000 in personal loans.
