Hong Kong is now the most expensive place for foreign workers to live, while a weaker pound has helped make London slightly more affordable for expats in the city, according to a global survey.
Currency fluctuations and the collapse in the price of oil have reshuffled the deck for international cities, where imported goods and scarce upmarket housing tend to increase the cost of expatriates, according to Mercer’s research.
The Angolan capital of Luanda, for example, has long been expensive for expats because of the oil boom that has drawn in a global workforce to a country with an average GDP of around $5,900 per head.
However, the city has ended its three-year run at the top of Mercer’s table after the tumbling oil price took its toll on the country, leaving Hong Kong as the world’s priciest place for expats.
Zurich, Singapore and Toyko rounded out the top five. London has fallen down the rankings, from 12th to 17th place, in part because the weak pound against the dollar over the past year made life for international workers less expensive.
Aberdeen has fallen seven places to number 85, as the oil industry continues to lose steam, while Birmingham slumped 16 places to 96.
“While most Western European cities have remained stable in this year’s rankings, UK cities have fallen,” said Kate Fitzpatrick of Mercer. “However, the drop is not as large as to be expected, with steep rental prices keeping UK cities up.”
The research estimated the cost of a two-bedroom flat “of international standards” at around £3,200 a month in London, compared to £4,754 in Hong Kong, £2,400 in Beijing or £1,840 in Sydney.
Luanda, where the supply of upmarket housing and international neighbourhoods is more limited, an apartment deemed suitable for an expat costs £4,678 a month.
Among the cheapest cities are the South African hubs of Johannesburg and Cape Town, where the slump in the rand has made it cheaper, particularly for workers paid in another currency.
The research examines the cost of 200 items in more than 375 cities. The cost of each city will be affected by the fortunes of the country in which it sits, as well as exchange rate fluctuations that alter the price of imported foreign goods that may only be available to the wealthy expat community.
London was near the middle of the pack for a cup of coffee in a major city, coming in at £3.10, while setting back a Hong Kong resident around £5.43.
A loaf of bread, which seems like a bargain at £1.69 in Hong Kong compared to £4.15 in a Toyko market or £5.84 in New York.