Cost of living
Bangkok as 29th most expensive Asian city
While Japan remains the most expensive Asian locations for international assignees, Bangkok and Chiang Mai are two cities of Thailand which are among the top 50 most expensive locations in the region.
In the annual survey by ECA International, a global consulting firm, Bangkok’s ranking moved sharply lower from the 17th in last year’s ranking to the 29th. Chiang Mai is also down one place to the 31st. In the global cities ranking, they are in the 163rd and 198th places, respectively.
Tokyo is still the most expensive location in the world and, within Asia, Japanese cities occupy the top four places.
In Asia, as China lures global business, Beijing has risen from 8th to 5th most expensive location in Asia while Shanghai has moved from 9th to 6th position. Singapore has fallen from 6th to 8th position in the rankings of the most expensive Asian locations for international assignees. Beijing’s move up the global rankings has been particularly dramatic. The city is now the world’s 20th most expensive city, up from 48th place in the same survey last year.
"The rate of increase in the prices of goods and services commonly purchased by assignees in China has gone up sharply in the past year," explained Lee Quane, regional director, Asia for ECA International. "In addition, the Renminbi has strengthened against major currencies. Together, these two factors have contributed to pushing up the cost of living in Chinese cities for international assignees significantly. For many companies the cost of posting employees to China has risen significantly compared to those posting employees to Singapore, Hong Kong and other locations in the region."
Despite falling in the Asia ranking, Singapore has continued its rise up the global ranking. The city is in 32nd position, up from last year’s 38th position and the previous year’s 69th place. It is higher in the ranking now than cities such as Berlin (47) and Paris (34).
"Prices of goods and services in our basket of items commonly bought by international assignees in Singapore have increased almost 6 per cent on average in the last twelve months, says Quane. "This is almost double the rate at which they rose a year ago. This together with the fact that over the same period the Singapore dollar has remained strong against other major currencies has contributed to Singapore's continued rise up the global ranking."
Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out two Cost of Living Surveys per year, comparing a basket of consumer goods and services commonly purchased by assignees in 400 locations worldwide. Certain living costs such as accommodation, utilities, car purchase and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.
In Asia as a whole, the price of goods and services commonly purchased by expatriates has risen by just over 6 per cent on average - slightly higher than the 4 per cent increases witnessed a year ago. While Japan has seen the smallest price increases in the region, Tokyo is still the most expensive location in Asia - and the world - for international assignees.
Globally, the rapid rise of Beijing and Shanghai have seen both cities overtake a number of locations in Australia, Brazil, Europe and the United States, including Rio de Janeiro (31st), Paris (34th) and Manhattan (40th).
Locations across mainland China have also climbed up the ranking and second-tier cities Shenzhen and Guangzhou now sit just behind Hong Kong at 10th and 11th place respectively in the Asian rankings and 55th and 56th in the global ranking. For the first time, both cities are now more expensive than Central London (at 62nd place), along with Beijing, Shanghai and Hong Kong.
Like Singapore, Hong Kong is now below Beijing and Shanghai in the ranking and has dropped from 7th to 9th position within Asia. However, the city has climbed back up the global ranking, following last year’s falls. Hong Kong is the 36th most costly location globally up from last year’s 47th position and almost back to the 34th place it held two years ago.