The Big Apple has surpassed Hong Kong as the costliest place for ex-pats to live, after four years of the Asian city holding the top spot, according to the latest analysis on the most expensive cities by Employment Conditions Abroad (ECA) International.
ECA’s annual report, which compares costs for ex-pats in 207 cities, shows how high inflation rates and skyrocketing rents saw cost-of-living soar in many of the world’s most popular cities.
While Hong Kong has seen extremely high inflation, a fall in accommodation costs meant New York overtook it for the top spot.
'New York rose above Hong Kong in the rankings as inflation was higher than in Hong Kong, particularly for rents, which rose around 10 per cent,' Steven Kilfedder, Head of Production at ECA International, tells Spear’s.
Kilfedder says demand for Hong Kong rentals from expatriates has dropped.
Measuring the world's most expensive cities for ex-pats
As well as examining rental prices in the cities' most popular areas, ECA measures the cost of commonly purchased consumer goods such as coffee, sugar, petrol and eggs.
In New York, with overall food price inflation reaching 6.6 per cent at the end of April, a bag of sugar cost the equivalent of £3.27, more than triple the price of the same item in London.
While the rise in the price of cooking oil in the UK may have shocked local consumers, it still remains over a third cheaper than the same purchase in New York or Geneva.
And out of the top five cities in the ranking, London is the cheapest to buy a cup of coffee in a cafe.
After a year of headlines about the UK’s cost-of-living crisis, it may be surprising to see London retain its position of fourth place, rather than move up the list. But despite the record-breaking rises in prices of food, utilities and rent in the UK, this is outweighed by the exchange rate.
The strength of the British pound had already been falling in the first half of 2022, and Truss’ Autumn Budget saw it drop to barely more than a dollar exchange rate.
'Even when prices are rising quickly, as they are in London, it is not enough to move it up the rankings as the pound has been relatively weak against other major currencies, cancelling out the impact of higher prices for visitors to the country,' Kilfedder says.
It's for this reason UK cities outside the capital have fallen down the rankings. Birmingham has tumbled 16 places, losing its spot in the top 100 most expensive global cities for expats.
The majority of Asian cities saw comparatively low inflation rates, meaning expats in those cities will have experienced a lower cost of living than in other parts of the world. Tokyo fell by five places in the rankings, as did Shanghai and Guangzhou.
Singapore and Seoul were the two cities that bucked this trend. Singapore rose by four places to become the fifth-most expensive expat city in the world, due to significant rises in rental prices in the city.
Singapore had the highest prime rent growth in the world last year, according to analysis by Knight Frank, which found the city's prime prices up 28 per cent in the year to Q4 2022, surpassing New York (19 per cent growth) and London (18 per cent).
'Increased demand for rental accommodation in the city-state, driven by factors such as the earlier relaxation of Covid-19 restrictions compared to other key locations in the region, was not matched by corresponding increases in the supply of suitable accommodation,' says Kilfedder.
Rental demand in Singapore is expected to continue to rise with the introduction of a five-year work visa for high-earning tech professionals, though the expected delivery of over 15,000 new homes this year should ease the market somewhat.
This article was originally published on Spear's, part of NSMG.