Cities for the Budget-Conscious Expat

In 2018, three Asian cities make it to the podium in the Finance & Housing Index, offering the best value for money. Expats, however, struggle to find affordable housing and stick to their budget in the bottom 3 destinations.

Newcomer Ho Chi Minh City places first in the Finance & Housing Index and fourth overall.
Despite being relegated to second place, 2017 winner Bangkok actually receives better responses in 2018 than in 2017.
Although Kuala Lumpur does not excel in the finance subcategory, the city ranks first for affordable housing.
Dublin, Stockholm, and Vancouver make up the bottom 3 in 2018.

Finance & Housing and Local Cost of Living Indices — Top 15

Methodology

In 2018, 72 cities make it into the Expat City Ranking with a minimum sample size of 45 respondents per city.

The Finance & Housing Index is based on two subcategories with two questions each. In the Finance subcategory, survey participants were asked how satisfied they were with their financial situation and if they felt their disposable household income was enough to cover the costs of daily life. The first question carried double the weight in the subcategory.

For the Housing subcategory, on the other hand, survey respondents were asked if they considered housing in their city affordable, and if it was easy for expats to find housing. Both questions carried the same weight.

Although the Cost of Living Index did not factor into the ranking of the Finance & Housing Index or the overall city ranking, it is mentioned in this article to give a well-rounded impression of expats’ financial situation around the world.

#1 Ho Chi Minh City — An Underrated Top Pick

When it comes to finance and housing, Ho Chi Minh City, the biggest city in Vietnam, makes the most positive impression on expats. The newcomer also ranks among the top 5 overall, making it to 4th place out of 72 cities. It comes in first in the Housing subcategory, especially due to its impressive results regarding prices: 30% of respondents consider housing options in Ho Chi Minh City very affordable, three times the global average (10%).

Accommodation is not only budget-friendly, it is also easily available: more than half of all survey participants in Ho Chi Minh City (51%) find it very easy for expats to find a place to live, compared to 18% worldwide.

This may be partly due to the rapid real estate growth all over the country: Foreigners were granted the freedom to buy up to 30% of apartments in new buildings in 2015, which has led to a construction boom all over the country but especially in Ho Chi Minh City. Although many new projects are focused on well-to-do expats and foreign investors, rents have been hardly rising in Ho Chi Minh City, according to the Financial Times.

Nine in ten respondents (90%) consider their disposable household income enough or more than enough to cover their daily costs, compared to 78% of expats worldwide. Thus, it is not a surprise that nearly three-quarters (73%) are satisfied with their financial situation.

The job I have is very exciting in terms of the future and the salary I receive is very good.

Moreover, Vietnam’s economy seems to be going strong: the first half of 2018 shows a 7.1% growth year-on-year. “The job I have is very exciting in terms of the future,” a British expat points out, “and the salary I receive is very good.” When it comes to the cost of living in the city, 82% of respondents in Ho Chi Minh City believe it to be good — the city occupies first place in this index.

#2 Bangkok — Still Top!

Having occupied first place in 2017, Bangkok still comes second in 2018. Despite being outperformed by newcomer Ho Chi Minh City, Thailand’s capital actually receives better feedback in both subcategories of the Finance & Housing Index, compared to 2017.

The vast majority of respondents (71%) are satisfied with the affordability of housing in Bangkok. In fact, 27% even consider it to be very good, compared to a global average of only 10%. Moreover, accommodation seems to be easy to find for expats: five out of six respondents (83%) agree with this statement. One reason for this might be the fact that the supply is high, and landlords are competing to find tenants for their property. According to Thailand Property News, most need at least three months to rent out their property.

I am wanting for nothing here. If I want something, I can find it easily and cheaply.

Things look similarly positive when it comes to expats’ financial situation. In fact, three-quarters (75%) are satisfied with this factor, and 32% even completely so. It is hardly surprising then that the majority (90%) believes that their household income is enough or more than enough to get by. A little less than seven in ten (68%) even consider it more than they need to cover daily expenses in Bangkok. An expat from the US says: “I am wanting for nothing here. If I want something, I can find it easily and cheaply.”

The affordability seems one of the unique selling points for many expats in Bangkok. “The cost of living is great,” an Australian survey respondent says, “and Bangkok offers such a variety of experiences.” In fact, 73% of survey respondents in the city are satisfied with the cost of living, and two in seven (29%) are very happy with this factor.

#3 Kuala Lumpur — Not as Cheap but Still Affordable

Malaysia’s capital only just misses the top 5 in the overall ranking in 2018, placing sixth, but makes it to the podium of the Finance & Housing Index. The city even ranks first for the ease of finding housing for expats: 86% are generally happy with this factor, and 46% even think it is very easy to find accommodation in the city.

The city receives less striking but still above-average results for the affordability of housing: 56% rate it positively, compared to only 37% worldwide. High levels of speculation and new constructions have had quite an effect: the property market in Kuala Lumpur suffers from an oversupply, and property owners need to lower their rents to be able to find tenants. While problematic for those who purchased property as an investment, expats benefit from the affordable rents in the city.

Unfortunately, Kuala Lumpur doesn’t show that stellar a performance when it comes to finance — the city ranks 10th in this subcategory. Although close to seven in eight (87%) believe that their disposable household income is enough or more than enough to cover daily costs, Kuala Lumpur “only” makes it to 13th place for this factor. Just over two out of three survey respondents (68%) are happy with their financial situation overall.

Not quite a quarter (23%) are very happy with the cost of living in Kuala Lumpur, almost twice as much as the global average (12%). A survey respondent from New Zealand points out that the city offers a “good quality of life with a good income”, while an expat from Switzerland says that life in the city is “easy-going for a retiree, offering good value for money”.

From Ireland to Canada — The Cities in the Bottom 3

Dublin already placed in the bottom 3 for Finance & Housing in 2017, and the city’s ratings are even worse in 2018, with the Irish capital placing last. While its performance in the Finance subcategory is not particularly good — Dublin ranks 63rd out of 72 cities — the housing situation seems to be the main disappointment for expats. A survey respondent from Switzerland points out: “The housing situation is horrendous — houses are mostly in bad shape (humid and moldy).” Housing is also very hard to find for expats in Dublin, according to 42% of survey respondents, and nine in ten (90%) rate its affordability negatively — only Hong Kong performs worse. The cost of living in the city is generally not considered good: 70% rate this factor negatively. “There are limited opportunities in my area of work outside of Dublin, but there is such a high cost of living that it makes the salaries there unlivable,” according to a US American expat living in the city.

Sweden’s capital Stockholm occupies 71st place in the 2018 Finance & Housing Index and also ranks in the bottom 10 overall (69th out of 72). Expats in the Swedish capital struggle to find housing, with 56% considering it very difficult, ranking the city last worldwide for this factor. The affordability of housing is also a major issue for expats in Stockholm: 81% rate this factor negatively. According to the Financial Times, the city experienced a “crisis of affordability” in 2017 after years of climbing prices. The slowdown in the housing market also led to second-hand rental costs going up by 6% across the country, and expats who try to rent directly from a real estate company (first-hand rentals) may quickly find themselves on a five-year waiting list. The housing costs are also reflected in the city’s cost of living: 65% of survey respondents are unhappy with the cost of living. Still, around three-quarters (76%) believe that their disposable household income is enough or more than enough to cover their daily costs, just below the global average of 78%.

The third place in the bottom 3 goes to Vancouver. The city is new in the 2018 ranking and places last for both factors of the Finance subcategory. Twice the global average (16% vs. 8% globally) give their financial situation in the Canadian metropolis the worst possible rating, and 53% believe that their disposable household income is not enough to cover all daily costs. “Vancouver is very expensive,” a Dutch expat points out, “and jobs for foreigners are difficult to find.” It does not come as a surprise that housing, one of the big items in every expat’s budget plan, does not come cheap in Vancouver, either. A little over five in six respondents (84%) do not consider housing in Vancouver affordable. More than half (51%) even give it the worst possible rating. Moreover, 52% of survey respondents believe that housing is difficult to find in the city. A Dominican survey respondent does not see the situation improving anytime soon: “The cost of housing is high in Vancouver, and the federal and local government are doing nothing to solve the problem.”

Other Low- and High-Budget Destinations

Dublin and Stockholm occupy the last places in the Housing subcategory, but the 70th place is reserved for another European city. Munich is well known for its competitive housing market, and thus, it is not surprising that three-quarters (75%) find it difficult for expats to find a place to live there — 40% even give this factor the worst possible rating. Moreover, 85% rate the affordability of housing negatively, and 41% very much so. Although Munich doesn’t make it into the bottom 3 of the Housing & Finance Index, the city places among the bottom 10, coming in 69th place.

While the top 3 in the Housing subcategory are also occupied by the top 3 of the index — Ho Chi Minh City, Bangkok, and Kuala Lumpur — things look somewhat different in the Finance subcategory. Beijing makes the jump from its sixth place in 2017 to first rank in 2018. Nine out of ten survey respondents (90%) say that their disposable household income is enough or more than enough to cover their living expenses, and 78% are happy with their financial situation. Unfortunately, the city only ranks 38th in the Housing subcategory, which pushes it down to 18th place in the Finance & Housing Index.

Second in the Finance subcategory is newcomer Taipei, where 77% of respondents are happy with their financial situation and well over one-third (37%) very much so. Moreover, 89% agree that their disposable household income is sufficient or more than sufficient to cover all costs. Taiwan’s capital just about misses the top 3 and places fourth in the Finance & Housing Index.

Expats on a budget should think twice about moving to the cities occupying the bottom 3 of the Finance subcategory. While Vancouver still comes in last, 71st place is occupied by Athens. Nearly three in seven expats in the Greek capital (42%) don’t think that their disposable household income is enough to cover their daily living expenses, and over one-third (34%) are unhappy with their financial situation, 20% even very much so. The housing situation, on the other hand, seems to be quite relaxed in the Greek city: Athens ranks 5th in the Housing subcategory and consequently 26th in the index overall.

Although Bern still makes it to 47th place for housing, it comes in 70th in the Finance subcategory: 42% are unhappy with their financial situation, and over three in eight respondents (38%) disagree that their disposable household income is enough to cover daily costs. Overall, the Swiss city occupies 60th place in the Finance & Housing Index.