December 5, 2008 Friday

Expats' living costs rising faster in HK than S'pore

WHILE living costs for expatriates in Singapore are rising, they are going up even faster in regional rival Hong Kong.

It is now 15 per cent more expensive to live in Hong Kong than in Singapore, according to the latest Cost of Living Survey released by human resource data firm ECA International.

This is a bigger difference than last year, when the cost of living in Hong Kong was 12 per cent higher than here.

Globally, Singapore has shot up 35 spots from last year's survey to rank as the 95th most expensive city to live in this year. Hong Kong is at 33.

In Asia, Singapore is at No.12 while Hong Kong is ranked sixth.

The new figures show Beijing to be 15 per cent more expensive to live in than Singapore. The Chinese capital ranks as the fifth most expensive Asian city, and No. 31 overall.

ECA carries out its survey twice a year to help multinational companies calculate remuneration packages and living costs for expatriates.

The study compares a basket of 125 consumer goods and services commonly bought by expats in over 370 locations and measures these items against inflation, availability of goods and exchange rates.

That is why the Angolan capital Luanda is the most expensive location for foreigners for the second year running, as certain items typically purchased by expats are not readily available there.

ECA said the wild currency fluctuations caused by tumultuous global economic events this year contributed significantly to how a country ranked.

The strengthening of the yen meant Tokyo has reclaimed its position as Asia's most expensive city. It was second after Seoul last year.

It also meant that three other Japanese cities - Yokohama, Nagoya and Kobe - joined the ranks of the top 10 most expensive cities globally.

Meanwhile, Korean locations have seen the largest relative fall in cost of living due to the depreciation of the won, which fell more than 48 per cent against the US dollar between September last year and last month, said ECA.

Mr Lee Quane, general manager of ECA Asia, said research shows most companies pay expats in their home currency while they are on assignment, which could mean lower purchasing power in unfavourable exchange rate environments.

'Companies which split pay between the employee's home and host countries will be much better equipped to ride out the currency volatility,' he added.