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Australasia Assignments Evolve due to Cost of Living Increases

December 7, 2011 by Kate Cavanough

In these times of financial uncertainty, we in the Relocation industry have certainly noticed a change in trend in Expatriate locations and employer packages being offered to employees. In Asia pacific we have seen a growing trend in relocations from India to Singapore to coincide with the increased activity in the IT and banking industry. The types of relocations have evolved into fast movements, allowing employers to transfer high volumes of staff with specific expertise within a shorter space of time. The usual Expatriate package would usually take months’ of preparation by tax, immigration and HR teams combined with their Relocation vendor, but in recent years we see a significant decrease in these types of packages, morphing into the swift preparation of a permanent transfer, locally hired without the tax implications and full expatriate privileges being offered. Employees who are seasoned expatriates, taking back to back assignments with one or more employer may be taken aback by the dramatic change to their future assignments, which may result in the offer to relocate seeming less favorable. The new assignee without previous experience do understand the types of packages being offered now are on trend with the current global financial status, and in order to progress in a career, it could be still seen as a step up the ladder to take on a package in a foreign country.

In Australia specifically we are seeing a dramatic increase in the Cost of Living, in cities usually considered quite reasonable and perhaps less expensive that your most popular locations, such as Sydney. The recent cost of living analysis shows the costs for renting properties, fuel costs and groceries are now much higher in cities such as Brisbane. The Coal and Gas Mining industry has of course had a huge impact on the growth of the employment industry and fluctuations of expatriates into Brisbane and Northern mining areas such as Emerald which have given a boost to all areas of the local economy which has been well received. The relocation packages for this area would have previously been quite modest, as housing was reasonable, however now, the prices have become on par and in some cases higher in cost than larger interstate capital cities. According to RP Data property prices in some Brisbane suburbs have fluctuated from AUD $299,000 to AUD $600,000 in just 8 years and housing in the north closer to the mining areas have increased from AUD$ 135,000 to AUD $390,000 which directly affects the rent prices for our expatriate families. Mining towns in Western Australia such as Karratha are experiencing rents of over AUD $1000 per week for small family sized homes, which would be leased at one quarter of that cost in non mining areas. Purchasing property in this area is not realistic unless you are a 1 million dollar plus buyer. With increased costs of living, we will see expatriate packages changing to allow for these significant costs to companies, for housing schooling and general cost of living increases. It is a sign of the times, and is sure to have our Relocation industry specialists in Asia Pacific constantly tracking these changes.