Tokyo named most expensive city for expat staff
Tokyo has now become the world’s most expensive city for expatriate staff to live in, according to new figures.
From research carried out by the consultancy Mercer, it appears that the yen’s rise against the dollar has pushed up the cost of living for staff and firms paid in other currencies. As a result, Tokyo has now overtaken Angolan capital Luanda to claim the title of most expensive city for expats.
Mercer looked at the cost of living in 214 cities, using prices gathered between March 2011 and March 2012. According to their research, accommodation remains the biggest cost for overseas staff, accounting for 25% of spending. This is followed by transport and utility bills.
Paris, Rome and Amsterdam have all fallen down the rankings, as a weaker euro reduced costs for overseas firms. Indeed, falling incomes and rising unemployment due to the recession in most eurozone countries have depressed prices, with the cost of renting accommodation falling in Berlin and Madrid as well. Additionally, the euro has fallen 16% since its peak in May – translating into a 16% discount for staff and companies operating in the eurozone. London, meanwhile, ranked 25th – down seven places from last year.
In contrast, the relative boom in many Asia-Pacific economies has pushed up bills for expats in the region. For instance, in Shanghai, spending on accommodation has risen 73%. Rents in the world’s most expensive property market, Hong Kong, rose 23% to $7,039 for a two-bedroom apartment, whilst rents in Beijing were up 15%.
Strong swings on the currency markets have been bad news for overseas companies operating in Asia, especially those who receive most of their income in euros. European firms would have faced rises of up to 15% in Australia and 8% in Japan purely on the basis of exchange rate movements.
With living costs on the rise in these regions, it is vital that expatriates make adequate provision should they suffer an injury or illness that prevents them from being able to work. A Global Income Protection plan from William Russell allows expats to insure their salaries – meaning if they have to take long-term sick leave, they would have a replacement income with which to maintain their standard of living.
Bearing in mind the rising living costs in certain regions, alongside the fact that one in five will have a serious illness before reaching age 65, income protection takes on an increased importance in terms of the financial security arrangements of expatriates.
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Source – BBC News 12 Jun 12