SINGAPORE - Singapore now ranks as the 16th most expensive city in the world for expatriates, according to the latest survey from ECA International released on Wednesday (Dec 14).
It edged up two places on the global ranking from a year ago, and is catching up on Hong Kong, which dropped to 11th place from ninth last year.
"Singapore's cost of living hasn't risen much in Singapore dollar terms," said Mr Quane Lee, regional director, Asia, for ECA International. "Our survey recorded inflation of less than 1 per cent.
"The reason for Singapore's rise in the rankings globally was due to the strength of the SGD, making goods and services more expensive when converted into other currencies (such as the US dollar) than last year even though they have not changed in SGD terms."
ECA International, which conducts its cost of living survey twice a year, said Tokyo retook the global top spot for first time since 2012, leapfrogging 11 places over the past year. It was followed by Luanda and Zurich.
ECA's survey compares a basket of like-for-like consumer goods and services commonly purchased by expats in over 450 locations worldwide.
It excludes certain costs like accommodation rental, utilities, car purchases and school fees, because these are usually covered by separate allowances, ECA said.
The rankings reflect differences in inflation levels as well as exchange rate movements between the employee's home and host countries.
"The Singapore dollar has appreciated against most major currencies in the months leading up to our survey. Despite low price rises, the impact of the stronger currency means that where companies provide cost of living allowances to their international executives assigned to Singapore, these will likely need to be raised to ensure that employee purchasing power is maintained," Mr Lee added.
Over the past five years, Singapore has continued to rise in the global rankings from 33rd in 2011, up 17 places to 16th in 2016. In Asia, Singapore is the 10th most expensive location for expats, down from its eighth place at the end of last year.
Over the past five years, Hong Kong has generally risen in the ECA global rankings from 60th in 2011, up 49 places to 11th in 2016. From a regional perspective, it is the fifth most expensive in Asia with only Japanese cities ranking higher, down from third place this time last year.
The relative strength of the Japanese yen in the survey period pushed all Japanese cities above Hong Kong in the rankings, ECA said.
"For companies bringing talent into Japan the cost of an assignment will increase as higher allowances are required to maintain employees' purchasing power. On the other hand, companies sending employees out of Japan can pay lower cost of living allowances and still provide sufficient remuneration to maintain their standard of living," Mr Lee said.
A weakened pound in the wake of Brexit pushed London out of the top 100 most expensive cities globally for the first time since ECA's Cost of Living rankings study began. A year ago, London was among the top 50 most expensive cities.
"The weakened pound means that UK businesses are paying more when sending staff to work overseas, although it is cheaper to bring staff to the UK", said Mr Steven Kilfedder, production manager, ECA International.
"London is now cheaper than Paris, Berlin and Brussels thanks to the weak pound".
UK-based locations have seen the largest declines in our European rankings this year and the third largest decline in the world, behind Nigeria and Mozambique.
Zurich has fallen off the global top spot this year, moving into third place in the rankings. Despite prices falling in the previous year, Swiss cities continue to top the European rankings with all ranked locations placed in the global top 10, ECA said.