Japanese cities continue to dominate the most expensive cities’ list for expatriates. Seven cities from India have turned out to be among the costliest for expatriates.
Other South Asian cities in the ratings were Colombo ranked 42nd, Dhaka (44th), Islamabad (52nd) and Karachi (53rd).
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.
ECA International carries out a ‘Cost of Living Survey’ twice a year comparing a basket of consumer goods and services commonly purchased by assignees in 400 locations worldwide, to help multinational companies calculate assignment salaries.
New Delhi (Rank 38)
New Delhi, the capital city of India, is the most expensive city for expats in India.
Inflation is hurting nations around the world as the cost of food, oil and other commodities continue to rise. In Asia, the prices of ECA’s basket of goods and services in local currencies have increased by around 5.3 per cent on average.
Bangladesh (7%), Vietnam (6.2%), Indonesia (5.8%) and Hong Kong (5.5%) are among the Asian economies that have seen the highest rates of price inflation.
Rising inflation and slowing demand would moderate India’s economic growth to 8 per cent during 2011-12 from 8.8 per cent in the previous fiscal, said a World Bank report.
Mumbai (Rank 43)
Mumbai, the financial capital of India, is the second most expensive city for expats in India.
Mumbai’s property market was ranked as the 10th most expensive worldwide. Mumbai’s real estate prices have been steadily rising since 2000.
Mumbai ranks 6th among the most expensive for office spaces in the world.
Bangalore (Rank 46)
The IT hub of India is the third most expensive city in India.
Bangalore was included in the list of global cities and ranked as a ‘Beta World City’ alongside cities such as Dallas, Miami, Boston, Kuwait City, Lima, and Munich in the studies performed by the Globalisation and World Cities Study Group and Network in 2008.
Chennai (Rank 47)
Chennai, India’s fourth largest metro, has a diversified economic base dominated by automobile, software services, hardware manufacturing, healthcare and financial services industries.
It is the fourth most expensive city for expats in India.
Hyderabad (Rank 48)
The City of Pearls, Hyderabad is the sixth most populous city in India.
It is now a major hub for the information technology industry in India. Many biotechnology and pharmaceutical companies have set up their operations in Hyderabad.
Pune (Rank 50)
Pune is the eighth largest metropolis in India and the second largest city in Maharashtra.
The cultural capital of Maharashtra, Pune is known for its educational facilities and well-established manufacturing, glass, sugar, and forging industries.
It has turned into a base for many information technology and automotive companies.
Kolkata (Rank 51)
Kolkata is the financial hub of East India and the northeastern states. It is home to the Calcutta Stock Exchange, India’s second-largest bourse.
The third most populous metropolitan area in India, Kolkata saw an economic stagnation in the years following India’s independence in 1947.
However, since 2000, there has been an economic revival.
Tokyo (Rank 1)
Tokyo is the most expensive location in the world for international assignees, according to ECA International.
Although Japan is the only Asian country surveyed where the actual cost of goods in the ECA basket of goods has fallen, a strong currency and already higher costs for goods mean that cost of living for assignees is significantly more expensive than in other locations in the top ten.
Nagoya (Rank 2)
Nagoya is the second most expensive city for expats in Asia.
The fourth most populous urban area in Japan, it is the hub of Japan’s third largest metropolitan region, known as the Chukyo Metropolitan Area. Nagoya’s main industry is the automotive business.
Yokohama (Rank 3)
Yokohama is the third Japanese city to be ranked among the most expensive city for expats.
It is the capital city of Kanagawa Prefecture. It is a major commercial hub of the Greater Tokyo Area.
Yokohama has developed rapidly as a Japan’s main port city.
Kobe (Rank 4)
Kobe is the sixth largest city in Japan. Kobe is both an important port and manufacturing centre.
Seoul (Rank 5)
Seoul, the capital city of South Korea is considered to be a leading global city, ranked among the top ten global cities in the Global Cities Index of 2010.
It is one of the world’s top ten financial and commercial centers and home to major multinational conglomerates such as Samsung, LG and Hyundai.
In 2008, Forbes ranked Seoul as the world’s sixth most economically powerful city.
Singapore (Rank 6)
The strong Singapore dollar has made the island state the sixth most expensive city in Asia for expatriate living, according to ECA International.
The prices of goods and services commonly purchased by international assignees have risen at much faster rates in Singapore than in other developed locations in the region.
ECA International said goods and services in the city state now cost almost 3 per cent more than in Hong Kong, reversing a year ago trend when these cost 5 per cent more in Hong Kong.
Singapore was now more expensive for international assignees than Hong Kong, New York, Amsterdam, Frankfurt and Shanghai.
Hong Kong (Rank 7)
Hong Kong has been among the Asian cities worst hit by inflation, but this has been offset by the weakness of the Hong Kong dollar over the past year, according to ECA International.
Despite prices increasing by 5.5 per cent, in Hong Kong on average, the city has fallen from 33rd to 45th position in ECA’s ranking looking at cost of living for international assignees.
“High inflation and a weak dollar have had a double whammy effect on Hong Kong,” said Lee Quane, regional director, Asia for ECA International.
“High levels of price increases have impacted on the purchasing power of Hong Kong people at home, while overseas their purchasing power has been affected by a weaker dollar,” Lee said.
Beijing (Rank 8 )
Beijing, the capital of China, is among the most developed cities in China with tertiary industry accounting for 73.2 per cent of its GDP.
Beijing is home to 26 Fortune Global 500 companies, the third largest in the world after Tokyo and Paris.
China’s inflation stood at 5.3 per cent in April.
Shanghai (Rank 9)
Shanghai is one of the most prosperous cities in the world. It is also a hub of finance, commerce, fashion, technology and culture.
The cosmopolitan city with affluent consumers and highly educated skilled labour force make it highly attractive to overseas investors.
Shanghai recorded double-digit growth for 15 consecutive years since 1992.
Busan (Rank 10)
Busan is the second most expensive city for expats in South Korea.
It is South Korea’s second largest metropolis after Seoul. It is the largest port city in South Korea and has the fifth largest port in the world.
Since 1978, Busan has opened three container ports including Jaseungdae, Shinsundae, and Gamman.