Top 10 most expensive locations in the world (Source: ECA International)
SINGAPORE (EDGEPROP) - Singapore has risen four places in the latest global cost of living rankings, making it the eighth most expensive location in the world and second in Asia. This was one of the findings of the latest Cost of Living research published by ECA International on Dec 7.
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“The biggest driver behind Singapore’s rise in our latest rankings has been the double-digit increase in rental costs in 2022,” says Lee Quane, regional director – Asia at ECA International. “The Covid- 19 pandemic impacted the supply of accommodation coming to market, and the resurgent demand has increased significantly with the city reopening its borders once again.”
While this may be a short-term shock, it has been responsible for Singapore’s current position as one of the ten most expensive cities worldwide, adds Quane.
“Despite the general uptrend in inflation rates globally, those across Asia have seen relatively smaller upticks, resulting in almost 65% of surveyed locations in the region falling in this year’s Cost of Living rankings,” says Quane.
Source: ECA International
Hong Kong, which came in first in last year’s rankings, has moved down one place to become the second most expensive location in the world, according to ECA International. Despite relatively high rates of inflation and a strong Hong Kong Dollar, its drop can be attributed to a fall in accommodation costs.
Demand for properties popular with expatriates fell as the Hong Kong economy stuttered in the face of slowing economic growth in China, uncertainties in imposing the national security law as well as strict Covid restrictions.
“Like many places in the world, prices of day-to-day goods and services grew in Hong Kong at a rate well above what we have seen in recent years while also surpassing the average rate of growth witnessed in the Asia region,” says Quane.
Demand for rental accommodation weakened in Hong Kong because of its “sub-par economic performance recently”, which caused rental prices to fall in turn and contributed to Hong Kong’s decline in its rankings, notes Quane.
Chinese cities fell further down the rankings compared to last year, with Guangzhou and Shanghai dropping out of the global top 10. The Chinese yuan weakened against the US dollar amid relatively low inflation rates, says Quane.
Japan, which has typically been regarded as a country with a relatively high cost of living, saw a significant departure from the norm this year. The depreciation of the Japanese yen by 20% y-o-y against the US dollar led to big falls in the rankings for all Japanese cities surveyed. Tokyo, which ranked third globally last year, has fallen out of the top 10 this year, while Nagoya fell 49 places to 87th.
Source: ECA International
New York has been named the most expensive location in the world, owing to the strength of the US dollar and high inflation, adds Quane. These factors have also led to all other US cities moving up in this year’s rankings, with San Francisco now in sixth and Los Angeles entering the global top 20.
In contrast, most European locations have seen drops in their positions despite high inflation rates driven by rising fuel and food costs. This was primarily spurred by a weakened euro and British pound, which has made expenses in regional cities cheaper in comparison to other cities around the world.
“Following the euro’s significant depreciation to parity with the US dollar, cities across the eurozone fell in the rankings despite high inflation rates fuelled by the war in Ukraine,” notes Quane. “Throughout the region, only nine cities rose in the rankings, with London being one of them. However, the eurozone was not alone in this, as many other currencies also weakened against the US dollar.”