- The most expensive countries in Asia Pacific for expatriates to live in are: Japan; Papua New Guinea; Singapore; Australia, China
- The most expensive cities for expatriates to live in are: Tokyo (the most expensive in the world); Hong Kong; Yokohama; Osaka; and Nagoya
- The cheapest city for expatriates to live in is: Dushanbe in Tajikistan (766 most expensive in the world)
Which cities / countries drop in the ranking, and which moved up?
- The biggest mover down the rankings is Tashkent in Uzbekistan, which has dropped to become the 474th most expensive location in the world.
- The biggest mover up the rankings is Papeete in French Polynesia, which has risen to be the 117th most expensive location in the world.
Reasons for this movement:
Tashkent has become less expensive for expatriate’s to live in relative to other global locations. This is mainly due to the depreciation of the Uzbekistan Som against the US Dollar over the past year. In September 2011 US $1 could buy UZS 1750, today that has risen to over UZS 1920, increasing expatriate purchasing power by just under 10% in one year.
Papeetes high cost of living is mainly due to the fact that most goods and services are imported at great cost. Furthermore the economy is exposed to the global economy through its heavy reliance on tourism which went into a long decline from 2006 and was compounded by the global recession. Groceries and communication are particularly expensive.
Tokyo as the most expensive city in Asia-Pacific and the world has an overall cost of living index of 139.89 compared to New York with an index of 100. Tokyo is followed by Zurich, Geneva and Luanda in the world rankings.
Tokyo is the most expensive city mainly because of the historical strength of the Japanese currency, the high population density, the high level of salaries, and the lack of resources which result in a high proportion of imports. Particularly expensive in Tokyo are the following basket groups groceries, healthcare, housing, and transport. Benchmark price in a major international retail store for 1 kg apples is $7.08, 1 kg boneless, skinless, chicken breast $11.91, 1 kg cheddar cheese $18.22, and 1 L full cream milk $2.73.
Benchmark price for a private practice doctor visit for an uninsured patient is $125, and a private hospital stay per day including nursing care, medications, diagnostic tests, food, and related costs is $3,675. Benchmark rental for a secure upmarket unfurnished apartment (3 bedrooms) is $6,293 in a central location, and $3,209 in a suburban location, per month, excluding utilities.
To provide an assignee, sent from a low cost of living country to a more expensive country, with a similar purchasing power to what they have in their home country, requires an adjustment to their assignment salary. The amount of adjustment depends on which country they come from. The larger the difference in cost of living, the larger the adjustment required to ensure a similar level of purchasing power in the host country.
New York City is used as the base for the cost of living index rankings and the US dollar is used as the base currency. The cost of living data collected is representative of an expatriate lifestyle, where the local prices for fixed quantities of the same good and services at or near each location, and US dollar exchange rates are used. Prices in each location are affected by availability (i.e. supply and demand) as well as local pricing regulations and taxes on goods and services (e.g. premiums on luxury goods). Local inflation is usually representative of local price increases, which in turn impacts an expatriates purchasing power in the host country. The exchange rate impacts both the price of imports to the host country and the expatriate assignment salary calculation between the home and the host country. The cost of living has a significant impact on the purchasing power of an expatriate’s salary package.