“Connecting Global Cities” is a monthly column written by Colin Speakman, Resident Director for CAPA Shanghai.
Global cities are usually not cheap places to live in, but it depends on where you are. Annual surveys of the comparative costs are undertaken by various consultancies to help Human Resources directors determine fair compensation packages for staff serving abroad for a period - to set the appropriate expat salaries. As I will explain further below, these surveys are not a perfect guide for comparing the costs faced by locals and long term expats in different cities but provide a useful first entry comparison and are often similar to costs faced by tourist visitors.
This year's Economist Intelligence Unit survey of costs of living in global cities provides a wealth of information - The survey compares the prices of 160 goods and services in 133 cities around the world and, to re-emphasize, is primarily used by human resources managers to calculate compensation packages for overseas postings.
Which global city is the most expensive? It is not in the top three global cities ranked by the A. T. Kearny Global Cities Index - London, New York, Paris - it is Asia's Singapore. This nation state has retained its title as the world’s most expensive city for a fourth consecutive year. The survey found that Singapore was 20% more expensive than New York and 5% pricier than Hong Kong, which lies in second place.
A sustained recovery in the strength of the Japanese yen has led to rising costs in Osaka and Tokyo. Asia now hosts five out of the six most expensive cities in the world.
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Photo: Hong Kong by Colin Speakman