India’s financial capital Mumbai has plunged 34 places to 94—the steepest fall for an Asian city—in a global ranking of the most expensive cities in the world for expatriates, pulled down by a weak rupee and cheaper rents as the coronavirus outbreak hammered the Indian economy.
Hong Kong remains the most expensive location in the world on ECA’s International Cost of Living Report 2020 despite a drop in rents due to the COVID-19 pandemic, which has had a wide-ranging impact on the annual rankings.
“A combination of a weak rupee and some cheaper rents in the city’s expatriate rental market pushed Mumbai down the rankings,” said Lee Quane, regional director for Asia at ECA International.
Mumbai is now a place below the Australian city of Perth. Last year, they were 58 places apart, ECA International spokesperson told Moneycontrol.
New Delhi is at 144, down 14 places from 2019. Bengaluru is ranked 174, two rungs up while Hyderabad has moved up 11 places to be ranked 177. Kolkata moved a place up to 179.
Quane said other cities in India fared better despite similar circumstances, mainly due to the poor performance of the currencies of many other countries around them in the rankings.
Also read: India's rank slips 7 places at 54th in terms of housing prices appreciation globally
Tokyo is the second most expensive city followed by New York and Geneva. The four cities retain their rankings from 2019. Zurich and London are at fifth and sixth positions this year, moving up the ladder as rebounding euro and sterling pushed up the cost of living for overseas workers.
ECA’s Cost of Living rankings began in 2005. It compares a basket of consumer goods and services purchased by assignees at over 480 locations across the world. The accommodation data compares rents in areas typically inhabited by expatriate staff at more than 390 locations worldwide.
The indices are used by ECA clients to calculate the cost of living allowances for staff. The research covers food, household goods, clothing and electrical goods, eating out, alcohol and tobacco, utilities and public transport.
When lockdown started easing in June, rents had been trimmed by 15- 20 percent. By the first week of November, rents quoted by landlords were down 25 percent from pre-COVID levels at a median level. For premium properties, the drop was more severe, between 30 and 40 percent.
“Hong Kong is the most expensive place in the world for overseas workers to live in spite of the economic impact of the COVID-19 pandemic,” Quane said.
China’s Tier 1 cities feature among the Top 20 most expensive cities in the world. Shanghai occupies 11th place, despite a weaker renminbi.
Also read: Mumbai homebuyers make the most of stamp duty cut; sales jump 67% despite COVID-19: Reports
Thai and Vietnamese cities dropped at least 10 places in the rankings as the pandemic took a toll on the local economy. The Thai baht and the Vietnamese dong weakened against major currencies because of the pandemic, as their tourism industry took a hit and the demand for the currency dropped. It also hit rental costs.
Singapore slipped two ranks to 14th place from last year.
Australian cities have become more expensive for overseas workers, resulting in every surveyed location in the country moving up the rankings, with Sydney entering the top 50. Australia is one of the few countries to have escaped a full-blown viral outbreak.
London is now the sixth most expensive location in the world, Paris is up 10 places to 29th, while Vienna and Munich have entered the global top 50. “However, with another Brexit deadline fast approaching, we should expect further volatility,” Quane said.
The drop in prices of crude, which was battered as lockdowns restricted movement and brought travel to a stop, meant that many cities where the local economy is heavily reliant on oil saw a huge economic impact, weaker currencies and a drop in their rankings.
This was the case in Brazil, Russia, Venezuela and other countries but the Angolese capital of Luanda was worse off–dropping 104 places from 37th to 141st, the ECA report says.
ECA International says it provides knowledge, information and technology that enables businesses to manage their international reward programmes.
On December 11, Knight Frank, a leading international property consultancy, in a report said India moved seven spots down in the global home price index to 54th rank in the third quarter of 2020 against 47th rank in the same period last year.
The Global House Price Index tracks the movement in mainstream residential prices across 56 countries and territories worldwide using official statistics.
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