Bangkok has become a cheaper place for expatriates during the last 12 months, with the city’s ranking in a global survey of 440 cities dropping to 172nd place – down 23 places from last year’s report.
Both Bangkok and Kuala Lumpur’s positions declined, in the latest Cost of Living survey from knowledge, information and technology management firm ECA International, although the decline can be attributed to weakening local currencies as opposed to any real declines in costs.
ECA said in the report: "Bangkok fell 23 spots to 172nd position, while Kuala Lumpur has fallen eight places to 194th place. Although items in ECA’s shopping basket have risen in price in both locations over the year, the weakening of the baht and the ringgit has meant that these cities have become cheaper for many expatriates."
Caracas in Venezuela is the world’s most expensive location for expatriates according to the twice-per-year report. The South American city was ranked 32nd in the global standings 12 months ago, but has now overtaken last year’s number one, the Norwegian capital Oslo.
Luanda which occupied second place last year, dropped to third ahead of a raft of European cities, including Zurich, Geneva, Stavanger, Bern and Basel and Copenhagen. The only other non-European location in the top 10 list was the African city of Juba, which sits in 9th place, down from 4tth in the previous ranking.
In Asia-Pacific Tokyo (11th globally) maintained its position as the most expensive Asian location for expatriates, but after losing the world top spot a year ago it has now also dropped out of the global top ten for the first time in at least a decade. Economic policy and fiscal changes, such as the increase in sales tax from 5-8 percent, have led to a significant increase in prices in Japanese cities. However, the yen’s continued depreciation against major currencies over the year has caused these locations to fall in the rankings.
Chinese cities have surged up the list in recent years. Just five years ago Shanghai and Beijing were barely in the top 50 now they rank 18th and 20th respectively. Prices have risen over the past 12 months in contrast to last year when prices of items in ECA’s shopping basket for Chinese locations increased little or even fell. In terms of currency, while the renminbi has fallen over the year against the euro and sterling it has strengthened against the US dollar.
Sydney has been overtaken by Auckland in the global rankings. The New Zealand city has jumped eight places over the year to take 36th position while Sydney fell from last year’s 17th place to 38th. The weakening of the Australian dollar against major currencies is the main factor behind all the Australian cities surveyed falling in the global ranking again this year.
ECA carries out two main Cost of Living surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is not compromised while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 440 locations worldwide.
Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg