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By Haruna Kobayashi, for ExpatBriefing.com
18 December, 2014
A cost-of-living survey has found that Seoul has overtaken Tokyo as the most expensive location in the Asia-Pacific region for expats, and that prices have been rising fast in China.
The survey was undertaken by ECA International, which advises companies on managing employees on international assignments. It was based on a basket of goods and services typically purchased by expats, excluding certain living costs (e.g. property rental, utilities, car purchases, and school fees) that are usually covered by separate allowances.
Lee Quane, who is ECA's Regional Director for Asia, said that South Korea's new position was due to a stronger won. He said that the currency had increased in value by 15 percent against the Japanese yen over the past year, and by over 8 percent against the US dollar and the euro.
However, although the Japanese Yen has lost value, prices in Japan have risen by 4 percent, largely due to economic policies to counter deflation. Globally, Tokyo is now the 12th most expensive location for expats, down from first place two years ago.
Quane further explained that expats in China are paying extra for imported brands that have become more available. Prices in Chinese cities rose faster during 2014, despite slower growth, and Chinese locations have been pushed towards the top of the ranking.
Quane predicted that prices for goods popular with expatriates were likely to continue rising "for a while yet," although China may fall down the rankings in the near future. This is because the country could experience deflation, while its controlled currency means that there is little chance of depreciation.
Meanwhile, Singapore has overtaken Hong Kong to become the ninth-most expensive location in the region. Prices for items in ECA's shopping basket for Singapore rose just over 4 percent over 2014, up from 2.7 percent last year, while they rose in Hong Kong by 4.5 percent.
There have also been notable cost-of-living rises in Indian locations, due to a stronger rupee, and in Malaysia.
In Australia, Sydney is currently slightly cheaper than Hong Kong, while the strength of the New Zealand dollar has pushed up prices for expats there.
The cheapest location surveyed in the region was Karachi in Pakistan.
Tags: Expatriates | Pakistan | India | Employees | Australia | China | Singapore | Hong Kong | Malaysia | New Zealand | Japan | Expats | Working Abroad | Asia-Pacific | Work | Working Abroad | Working Abroad
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