Why does it cost so much to be an expat?

Legitimate expenses, or keeping up with the Joneses?

If you're an expat in Hong Kong, a cup of coffee costs nearly $8. An unfurnished two-bedroom apartment in an "appropriate neighbourhood" will set you back $6,800 a month. A carton of milk? $4.

That's according to global consultancy firm Mercer, which last month ranked the most expensive cities in the world for expats in its 2016 Cost of Living report.

Hong Kong was top of the list, followed by Angolan capital Luanda, then Zurich in Switzerland and Singapore.

The list is compiled based on measuring the comparative cost of more than 200 items in each location. Items compared include accommodation, transport, food, clothing, household goods and leisure activities.

But do people really pay those prices, or are there ways for expats to live in places like Hong Kong or Luanda for less? What is it about the expat experience that makes these cities so expensive for foreigners to live there, but not necessarily locals?

Justin Heifetz, a 30-year-old journalist from the US who has lived in

Hong Kong on and off since 2011, said he was not surprised the city had topped Mercer's league table, because rents were "astronomical" and had risen markedly since he first arrived.

But he said "expat prices" could be avoided by living - like he did - on the Kowloon side of the city, further north and much cheaper than Hong Kong Island, which is home to the Financial District and a lot of the expat social scene.

"You can go even cheaper by living in the New Territories," he said, referring to the northern part of Hong Kong, which is geographically and culturally closer to China.

Dean Blackburn, head of HSBC Expat, an offshore banking arm of the HSBC Group catering to expatriates, agreed that rent was a major expense for expats.

Read the full article here