A new survey finds out the costs of living in metros.
Tokyo is officially the world’s most expensive city to live in for expats. According to research firm Mercer, their Worldwide Cost of Living 2009 survey found out that the Japanese capital has surpassed last year’s top city, Moscow, in the list. The survey reasons out that since the Japanese yen has become stronger against the US dollar, living costs in Tokyo and second-ranked Osaka, have also surged considerably. The measured factors include housing, transportation, food, leisure, and household supplies.
Since the dollar has also strengthened, seven US cities took huge leaps in their rankings and made it to the top 50. New York is now at number 8, rising from 22 last year. Los Angles is at 23 from rank 55. White Plains is at 31 from 89, San Francisco at 34 from 78, Honolulu at 41 from 77, Miami at 45 from 75, and Chicago at 50 from 84.
The firm’s press release states, “The survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees.”
Nathalie Constantin-Métral, a senior researcher at firm adds, “With significant exposure to multiple economies and currencies, multinational companies continue to be greatly affected by the financial crisis. The cost of expatriate programmes is heavily influenced by currency fluctuations and inflation rates. Now that cost containment and reduction is at the top of most company agendas, keeping track of the change in factors that dictate expatriate cost of living and housing allowances is essential. It is important for multinational companies to continuously benchmark against their peers to ensure compensation packages are fair and in line with the rest of the market.”
Therefore, we expect two things from this survey:
First, unless the company suffers from losses this year, expats already living in the US wouldn’t be so much affected by the results of the survey. They have more bargaining power than other employees and may resist any cut from their benefits.
Second, those who are still yet to be deployed here should expect some belt tightening from their company. If New York will cause their balance sheet to suffer, then demand for high-end accommodation will be affected. This slow down will hurt the local property market already battered by the rising number in vacancies.
If the company wants to retain its top notch employee but couldn’t guarantee the same luxury accommodation that it has granted to its expats before the housing bust, it must find other means to balance this out.