HK ends 3-year streak as world's most expensive city

Ashgabat unseats Hong Kong as the costliest city for expats.

Hong Kong dropped to second place after three years of being the world’s most expensive city, according to Mercer’s annual 2021 Cost of Living survey.

This year’s list of most expensive cities for international employees was dominated by Asian cities with Ashgabat, Turkmenistan emerging at the top. Also amongst the top 5 were Beirut, Tokyo, and Zurich.

Beirut, in particular, leaped from 42nd last year which was linked to the “severe and extensive economic depression” due to the Lebanon’s largest financial crisis, the pandemic and the Port of Beirut explosion in 2020.

“Across the region, companies are actively reassessing their talent and mobility strategies in light of the complex challenges brought on by COVID-19. Companies are realizing more than ever that they need to diversify their mobility scenarios and related compensation practices,” Julia Radchenko, Global Mobility Leader, Asia Pacific, said.

“And it is no longer about just geographical mobility, it is about talent mobility which implies lateral moves, distributed workforce, geographical mobility, international remote working, virtual assignments.”

The list also included Shanghai (6th), Singapore (7th), Geneva (8th), Beijing (9th) and Bern (10th).

Mercer noted it saw major increases in Mainland China cities driven by currency appreciation against the US dollar as well as its swift recovery from the pandemic.

Radchenko also said that companies are giving more flexibility to accommodate employees, whilst some are now more open to international remote working arrangements.

“International remote working arrangements bring with it other complexities such as determining the right compensation and whether such arrangements can fully replicate the importance and impact of having someone in a specific market,” Radchenko said.