Hong Kong is a densely populated global financial center built on a small piece land with very limited natural resources. Hence, the cost of living is understandable high. On top of that, the HK dollar has appreciated against most major currencies over the past few years. Nonetheless, it remains to be one of the world’s best cities to do business. Here is an article on CNBC that explains how this SAR became Asia Pacific’s most expensive city to live in:
Hong Kong tops the list as the most expensive city in Asia Pacific for expatriates to reside, according to a cost of living survey conducted by consultancy firm ECA International.
The city is also the second most expensive city globally — behind Luanda in Angola — and its ranking on the list has steadily increased in the last 7 years.
“Hong Kong has continued to get more expensive for expatriates. Over the past few years, the HK dollar has appreciated against most major currencies, owing to its peg to the US dollar, which has pushed up the price of goods and services relative to those in locations whose currencies have weakened against the greenback,” said Lee Quane, ECA International’s regional director for Asia, said in a release accompanying the ranking.
Stable prices in Japan coupled with a weaker yen against major currencies also accounted for why Hong Kong overtook Tokyo this year as the most expensive city in Asia.
“This means that for many companies, the cost of maintaining their assignees’ purchasing power while posted here has fallen and international assignees based in Japan may see their cost of living allowances decrease,” Quane said in the release.
ECA gathered the results by collecting price data across 464 cities, comparing a pre-determined basket of goods and services that are commonly purchased by expatriates globally.
This basket includes groceries, meals, leisure activities and expenditure on clothing and general services. It excludes certain expenses such as rent, utilities, automobile purchases and tuition fees that are usually provided by companies when their employees relocate overseas.
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