Eight of the world’s top 10 most expensive cities are located in Asia as a result of the region’s high costs for consumer goods and a dynamic housing market, while Australian cities continue to fall significantly in the ranking, according to Mercer’s 25th annual 2019 Cost of Living Survey.
Hong Kong tops the list as the world’s costliest city for the second consecutive year with the local housing market increasingly out of reach for many. Other cities appearing in the top 10 are Tokyo (2), Singapore (3), Seoul (4), Zurich (5), Shanghai (6), Ashgabat (7), Beijing (8), New York City (9), and Shenzhen (10).
Ashgabat in Turkmenistan saw the biggest rise in rankings, jumping an astonishing 36 places from 43rd in 2018, as a result of the country’s shortage of currency and imported goods driving up prices.
Australian cities fell as much as 26 places with Sydney the highest ranking Australian city at 50 (29 in 2018), followed by Melbourne at 79 place (58 in 2018), Perth at 87 (61 in 2018), Canberra at 96 (77 in 2018), Brisbane at 103 (84 in 2018), and Adelaide at 109 (87 in 2018).
Karla Costa, Mercer’s Global Mobility Leader for Pacific, said currency fluctuations were largely responsible for the drops.
“We’re seeing Australian cities fall in our Cost of Living ranking due in large part to the Australian dollar losing more than nine per cent to the US dollar over the past year. Australia’s low price movement and the rise of other main cities in the ranking are also among the main drivers,” Ms Costa said.
“While the actual cost of living in the Pacific has not fallen, the exchange rate is a key factor when calculating expatriate packages. As a result, our major cities in both Australia and New Zealand are becoming increasingly attractive as locations for international businesses to send expatriates. This is great news for our local workforce which will benefit from a richer, more diversified talent pool.
“On the other hand, currency fluctuations mean it has become more expensive for Australian and New Zealand-based businesses to send employees to many major international markets,” she said.
This year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
Mercer’s widely recognised survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar.
In a rapidly changing world, mobility programs have become a core component of multinational organisations’ global talent strategy. Multinational organisations are carefully assessing the cost of expatriate packages for their international assignees, influenced by a number of factors, including currency fluctuations, cost of inflation for goods and services, and volatility in accommodation prices.
“In a skill-focused economy driven by digital disruption and the need for a globally connected workforce, deploying expatriate employees is an increasingly important aspect of a competitive business strategy for global companies,” said Ilya Bonic, President of Mercer’s Career business.
“There are numerous personal and organisational advantages for sending employees overseas, including career development, global experience, new skillsets, and re-allocation of resources. By offering fair and competitive compensation packages, organisations can facilitate moves that drive business results.”[pro_ad_display_adzone id="915575"]