Regional Overview

While the cost of living in most locations in Asia-Pacific remained stable in the past year, some cities in the region are becoming a more expensive destination for expatriates.

In addition to cities in Japan and city-states Hong Kong and Singapore, which are all in the top 10 globally, Shanghai, Beijing, Seoul and Shenzhen are all among the top 30 most expensive cities in Mercer's 2012 rankings. Other Chinese cities have become more expensive, as well: Qingdao, Tianjin, Shenyang, Nanjing and Chengdu – all of which were below the top 100 in last year's rankings – are now ranked within that group. This increase is due to a stronger yuan and rising accommodation costs, along with steady price inflation throughout 2011.

A similar trend of increasing cost of living is evident in Australasia. All of the cities in Australia and New Zealand in our rankings became more expensive, with Sydney at number 11 in the world and Melbourne at number 15. Reasons for these increases include rising accommodation costs and the Australian dollar's continued strengthening against the US dollar in the previous 12 months. A similar situation affected New Zealand, with Auckland and Wellington both rising a significant 62 positions.

Meanwhile, the cost of living for expatriates has declined in some cities in South and Central Asia. New Delhi and Mumbai have dropped out of the top 100 costliest cities to live in, for example. Dacca, Bangalore, Tashkent, Kolkata, Bishkek and Islamabad rank closer to the bottom of the list, and Karachi has the lowest cost of living among the 214 cities ranked.

Tokyo (1st), Osaka (3rd) and Nagoya (10th)
With three cities in the top 10 in our Cost of Living rankings, Japan is one of the most expensive expatriate destinations. Tokyo occupies the top spot globally. All Japanese cities we rank rose in the rankings compared to their positions last year as the yen strengthened against the US dollar. The cost of imported goods also went up in Tokyo after the disasters Japan suffered in 2011. Meanwhile, rental prices decreased somewhat in Tokyo as people relocated from the affected area to the South of Japan. This trend led to an increase of accommodation costs in Osaka and Nagoya, helping push those cities up in the rankings.

Singapore (6th)
A popular expatriate destination, Singapore rose two places in our Cost of Living rankings since the 2011 release, reaching the 6th spot. A slight appreciation of the Singapore dollar against the US dollar contributed to this rise, along with the shift of other cities in the rankings.

Hong Kong (9th)
The cost of living in Hong Kong remained stable, landing the city-state in the same position in the 2012 rankings as last year. The high cost of accommodation is what makes Hong Kong an expensive expatriate assignment destination.