Lower cost of living in Australian cities could attract more expats

by Ray Clancy on June 23, 2016

in General Information, Jobs in Australia

Australia could become a regional talent hub as the cost of living for expats has fallen which could lead to more international companies employing people from abroad, it is suggested.

The latest cost of living survey from Mercers shows that Australian cities have all dramatically dropped in the 2016 rankings, mainly due to currency fluctuations against the US dollar.

Sydney was the highest ranking city at 42, down from 31 in 2015 followed by Perth at 69 and Melbourne at 7, falling from 48 and 47 in 2015 respectively in the global list while Brisbane at 96, Canberra at 98 and Adelaide at 102 all fell more than 30 places from 2015.

 

Australia-Sydney-Skyline

“Dropping in the cost of living rankings is not all bad news for Australia,” said Lorraine Jennings, Mercer’s global mobility practice leader in Australia and New Zealand.

“The drop in rankings of Australian cities against Asian cities is particularly good news. Five of the top 10 most expensive cities for expats are in Asia, which means Australia could be more cost effective and attractive for businesses to send employees on international assignments, particularly those doing business in the Asia Pacific region,” she explained.

“Companies are increasingly aligning their international assignment policies with career and succession planning strategies. They are looking for more opportunities to send early career, high-potential employees and strategic business leaders abroad as part of their career development,” she pointed out.

“Being a more cost effective option than some other cities in the region means Australian cities could become a rich breeding ground for talent for multi-national companies,” Jennings added.

Overall the latest survey report says that with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential for international companies, including a focus on expat remuneration packages.

Hong Kong tops the list of most expensive cities for expats, pushing Luanda in Angola to second position. Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo is in fifth, up six places from last year. Kinshasa, ranked sixth, appears for the first time in the top 10, moving up from thirteenth place.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai at seventh, then Geneva, N’Djamena and Beijing making up the rest of the list. The world’s least expensive cities for expats are Windhoek at 209, Cape Town at 208 and Bishkek at 207.

Mercer’s widely recognized survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees.

New York City is used as the base city for all comparisons and currency movements are measured against the US dollar. This year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

“Maximizing return on investment with fewer resources and talent shortages worldwide makes growth initiatives more difficult for multinationals. Organisations must ensure they can facilitate the moves they need to drive business results by offering fair and competitive compensation packages,” said Ilya Bonic, senior partner and president of Mercer’s Talent business.

He added that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller while low levels of inflation have translated into fairly steady cost increases around the world.

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