Home » Expat Focus Financial Update 22 August 2016

Expat Focus Financial Update 22 August 2016

World's most expensive city for expats revealed

London is no longer the most expensive city for expats. This title has now been claimed by New York, closely followed by Hong Kong.

That’s the verdict from property consultancy Savills, which analysed how much it costs an employee to work in an office and rent a home for one year.Among the reasons for London’s fall is the drop in the value of sterling and the capital’s real estate market cooling after the UK voted for Brexit.

London has spent nearly three years at the top of the charts for the most expensive cities for expats but fell to third place in July after years of booming property values – which are also now beginning to slow down.

Savills says the cost for one employee in New York for a year are $114,000, a rise of 2% from December last year. In Hong Kong the cost is $100,984, a rise of 1%.

In London, the annual cost per employee is $100,141, a fall of 11%.

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A spokeswoman for the firm said: “In December, New York was on the heels of London and virtually on par. London is more competitive in terms of cost because of Brexit.”

Employers found that the costs for relocating to Tokyo rose by 22% to $85,334 thanks to the rising yen and rocketing costs for housing and offices.

Savills says it focused on the cost for accommodating employees in creative industries and financial services which, they say, are the major driving forces for the economies of global cities.

New Europe group to represent British expats

A new group to represent the 1.3 million British citizens who live and work in the European Union has been launched.

Fair Deal for Expats is aimed at representing expats’ interests to the UK government as it plans for a post-Brexit future. It was launched in Lauzan on 14 August.

Originally created by a group of British people in the south-west of France, they are now speaking with groups in other EU member states.

One of their main aims is to support a legal bid that will force the UK government to ask for Parliamentary approval before invoking Article 50, which begins the process of leaving the European Union.

A spokesman for the group explained: “Our legal initiative will help ensure that the legal issues which pertain to expats are presented in the proceedings. The outcome of this will affect directly the lives of expats and their families.”

The group is now looking to recruit more members who are concerned about the process for leaving and in the future the group aims to lobby MPs and other representatives.

Expats enjoy low rents in subdued global economy

A report has revealed that expats around the world are enjoying lower rents because of subdued global economic conditions.

The report comes from ECA International, who say that most locations they cover in the survey have seen rent levels being static for the past year.

In addition, their annual report also says that low inflation rates have helped to keep wage increases down, which in turn has led to landlords struggling to dramatically increase their rents.

Some rental markets are now beginning to show rent rises of 5% and more but there is still a shortage of suitable properties to keep up with expat demand.

Of the cities surveyed, those with fast-growing business hubs have seen the largest rent rises rather than traditional business locations. Places such as Birmingham and Leeds in the UK, and Miami and Chicago in the US, have seen their rates growing much more quickly than rents in London and New York, for instance.

Countries that are seeing steady expat demand for quality accommodation include South Africa and Ireland.

Oil producing countries have also been affected with struggling rent rises since the fall in the price of oil, with cities such as Aberdeen and Stavanger being hit by the slump in oil prices. Indeed, the situation has led to rents falling in Calgary by 19.2% and in Aberdeen by 7.2%.

Also, the report highlights that landlords are increasingly advertising rents in major currencies, particularly in US dollars, so expats can avoid currency fluctuations and the landlord can collect money in a global currency.

ECA says this method of advertising rents is particularly popular in countries where the currency is volatile or weak and the landlord has a stable stream of a more stable currency which ‘can be very tempting’.

Omani employers using oil prices as a 'pretext' for lay-offs

Employers in Oman have been accused of using the pretext of low oil prices to release expat employees.

The accusation has been made by the General Federation of Oman Trade Unions (GFOTU) which says that trade generally has seen a downturn, with firms losing business so they are laying off skilled workers.

In addition, they are not retaining staff when contracts expire and Omani jobseekers are not seeing opportunities for employment.

A member of GFOTU’s board said that oil prices are not impacting directly on firms and employers but they are using this as an excuse for releasing their workers.

He added: “To show the companies are being affected [by low oil prices] they are releasing expatriates.”

The union also says that employers are reluctant to take on Omanis looking for work because they want to appear ‘vulnerable’ to the government and are wanting help.

The union is also complaining that many employers are refusing to follow the Omanisation standard which dictates the proportion of jobs that must be set aside for Omanis. Many employers say they prefer expats as they are ‘easier to work with’.

In addition, Oman’s private sector employers are said to be planning to release around 10% of their employees this year, according to a report from an online job website.

Kuwait 'nudges' out expats

Meanwhile, it has been reported that the Kuwaiti government has instructed state authorities to reduce contracts with private firms that employ expat workers as administrative and technical staff.

The move follows the government’s aim to reduce the number of expats working in government ministries and hand expats’ jobs to citizens, particularly Kuwaiti graduates.

Expats in Dubai are earning more

While the vast majority of expats living and working in Dubai are earning around Dh5,000 a month (£1,055/$1,360), new data reveals that expats are now earning more and staying longer.

The figures from the Dubai Statistics Centre reveal that in 2009, 12% of Dubai’s population earned Dh10,000 (£2,100/$2,720) but this has now nearly doubled with 20% of the population earning this figure.

Most of these expats are working in construction, retail, manufacturing and wholesale and also in public administration jobs.

Auckland gains 600 expats a week

Figures from Immigration New Zealand (INZ) have revealed that 53,000 expats declared they were going to settle in Auckland.

The city has seen a growth of 600 new residents moving in every week, once the 21,156 departures are added to the figures.

However, with net migration to New Zealand set to hit a new record of 68,000 this year, a conference discussed how the country’s infrastructure will cope and what skill requirements employers are looking for.

The government says there is still a strong demand for expats to move to New Zealand and they will need to create an additional 100,000 school places over the coming decades.

'Airlift' of Indian expats begins

Recent Expat Focus news round-ups have featured the plight of Indian expats in Saudi Arabia who have been left penniless after being laid off by their construction employers.

Now the Indian government has stepped in and has taken the first 25 expats home, with the Saudi government helping to smooth the way.

There are around 8,000 workers who have been laid off by Saudi Oger and they have been left struggling after not receiving salaries and have had to receive food and shelter in the 20 special camps that have been created. Many of these workers are also set to be flown home.

The Indian government has also pledged to ensure the workers are fully paid and receive their dues as soon as possible.

Insurance for expats

A unique insurance policy aimed at expats and international citizens and based on the UK’s ‘comprehensive’ style of cover has been launched by GlobalVoyager.

The policy covers expats and their families who are travelling to and from a destination for business or pleasure.

It’s available to people living in most countries and provides cover for evacuation, assistance benefits and emergency medical expenses. The firm says its insurance is a ‘one-stop solution’ in travel insurance for global travellers.

Expats are also being targeted by American health services organisation Cigna with a new digital promotional campaign that highlights their offering.

The firm prides itself on delivering a global wellness mission and says its campaign will run across multiple international markets and feature real customer stories.

Expats pay the price in Denmark

A new report has highlighted that home rental firms in Denmark are ‘conning’ expats as well as students with exorbitant rents.

Indeed, the report highlights that some landlords are charging rents that Danish renters would simply refuse to pay.

The Politiken newspaper has now accused two housing providers of using the lack of familiarity with housing rules by expats to charge higher than average rents.

The newspaper says some rent prices are up to four times higher than what is allowed by the country’s rent control board.

The head of Denmark’s renters’ association, Claus Hojte, told the newspaper: “Many have realised they can cheat those from abroad and it is deception since they are not renting in line with the law. Most Danes know about rental laws and the rent control board but those from other countries do not know Danish law or their rights. “The rents are completely crazy, illegal and it is a con.”

Where do the Swiss expats live?

Research has revealed that more than one in 10 Swiss citizens are now living overseas. These numbers have doubled since 1980, but it appears they do not stray far from home.

At the end of last year, around 760,000 Swiss people were living abroad with 62% of them living in Europe, 24% in the Americas, 7% in Asia, 4% in Australia and 3% in Africa.

The research reveals that the average age for Swiss expat women is 33, while for men it is 35. Retirees account for 7% of people emigrating from Switzerland.

The largest community of Swiss expats is in France with around 200,000 people, followed by Germany with 86,774.

In other news…

Expats living in Belgium and wanting free financial advice can attend a special event on Wednesday 19th October in Brussels between 6pm and 10pm, where representatives from BNP Parabis will offer help. The event is being held in English at 1 rue de la Chancellerie.

Asian expats living in Europe now have a new satellite TV service which is aimed at Indonesian and Chinese expats in particular. Bobbles.tv will, from November, also target Vietnamese and Korean expats.

Authorities in Oman have continued their crackdown on labour law violators and arrested 400 last month. Of those, 380 have already been deported, according to the Ministry of Manpower. Most were found working in commercial establishments without work permits, 64 were domestic workers and 35 were in the farming sector.

Qatar has announced it is to build three new hospitals by the end of next year dedicated to expat workers in the Central, North and South regions. The facilities will provide high quality healthcare with 120 beds, a clinic, an emergency ward and a health centre.

Expats in the UAE have been warned that all visitors to the country will now need health insurance cover under new visa rules that have been introduced. The visitor will also need to pay a Dh1,000 deposit when they enter the country, which will be refunded when they leave.