Hong Kong has ended its four-year reign as the most expensive city globally for expatriates — surpassed by New York which took first place, according to a new survey. 

ECA International’s latest “Cost of Living” research ranked 207 cities based on a basket of day-to-day goods and services commonly purchased by assignees. 

That includes food, utilities, public transport and basic needs such as household goods. The research aims to help organizations calculate cost-of-living allowances for assignees, the data company said.

Still, Hong Kong retained its position as the most expensive location in Asia.

“Costs for goods and services in Hong Kong rose at multi-year highs, showing that the city was not spared from the wave of inflation we have seen throughout the world in the past year,” said Lee Quane, regional director for Asia at ECA International.

“In spite of this, Hong Kong fell in our rankings as the increase in prices of day-to-day goods and services was tempered by falls in accommodation costs in the city.”

Hong Kong has hiked its mortgage interest rates to keep pace with the U.S. Federal Reserve — and home prices plunged to a five-year low in October as borrowing costs soar. The report is based on information collected in March, from 207 cities in 120 countries, said ECA. Reports suggest residents of Hong Kong left the city in droves last year — due to Covid-19 restrictions and what they see as an erosion of democratic norms.

The second most expensive location in Asia is Singapore, which rose eight places from last year’s ranking.

Singapore is also the fifth most expensive location globally, the survey showed, marking the first time it has risen into the top five.

This ascent was primarily driven by “rapidly rising accommodation costs,” according to the ECA. 

A recent report from the Urban Land Institute (ULI) Asia Pacific Centre for Housing found that private rental homes in Singapore had the highest monthly rent in Asia Pacific at $2,600 — “far exceeding” other cities.

Earlier relaxation of Covid-19 restrictions in Singapore drove up demand for rental accommodation, which was “not matched” by an increase of supply, said Quane.

However, Singapore is one of only a few locations in Asia that moved up the rankings this year.

Nearly all the Asian locations surveyed fell in the rankings, the report said, citing “lower rates of inflation relative to other regions” that were surveyed.

“[This] indicated that expatriates will find living in Asian cities relatively cheaper than the rest of the world in the past year,” the report said.

Most expensive locations for expatriates in Asia

1. Hong Kong
2. Singapore 
3. Seoul
4. Tokyo
5. Shanghai 
6. Guangzhou 
7. Shenzhen 
8. Beijing 
9. Taipei 
10. Yokohama 

For example, Chinese cities like Shanghai and Guangzhou have fallen out of the global top 10 and now rank as the 13th and 14th most expensive cities in the world.

“China’s relatively late emergence from Covid-19 related restrictions had an impact on its economy,” explained Quane.

“The yuan is weaker against the U.S. dollar than it was last year, resulting in lower costs in its cities.”

Similarly, currency depreciation “counteracted” inflation rates in Japanese cities — Tokyo, which was top five globally in the past five years, dropped five places to 10th, ECA said. 

“Tokyo’s fall in our rankings makes it a relatively cheaper location in comparison to recent years,” explained Quane.

“However, for companies moving staff from Japan … [it] means that companies may have to pay more in order to ensure that their employees’ purchasing power is protected whilst they are overseas.”

In the U.S., rankings for all cities surged this year due to the strength of the U.S. dollar and “significant rises” in rental costs, said the report.

According to the survey, New York moved up one spot to first place, while San Francisco moved up four places from 11th to 7th.