Data Points Q.3 2020

A Selection of AIRINC Research Results

This quarter’s cost of living research was conducted primarily in North America, Central and South America, the Middle East, Africa, and maritime Southeast Asia-Pacific.

Housing Update

Snapshots of expatriate-quality rental markets around the world

Guayaquil, Ecuador
Amman, Jordan
Nairobi, Kenya
Muscat, Oman
Manhattan, NY
San Francisco, CA
Sydney, Australia
Jakarta, Indonesia

Guayaquil, Ecuador

The Covid-19 pandemic hit Guayaquil hard in early 2020. Assignees fled and wealthy locals began to downsize due to economic slowdown. The demand for high-end rentals collapsed leading to oversupply and landlords are willing to negotiate rents. Real estate agents mentioned a new law that has halted evictions for at least a year, which is causing landlords to vet prospective tenants more thoroughly.

Amman, Jordan

Demand for Amman rentals fell significantly from February to September. The local airport was completely closed until early September when it reopened for diplomatic use only, reducing access to the city. Rents decreased and some tenants can negotiate down from already lower listed rents. Work from home policies have shifted existing demand from smaller properties to larger units with gardens or rooftop terraces.

Nairobi, Kenya

Rents fell in Nairobi over the past year, but it is common for prospective renters to further negotiate rents down from the lower listing price. The coronavirus pandemic decreased the number of incoming expatriates. Vacancy rates are up more in the city than in the suburbs due to a migration to suburban areas with lower population densities.

Muscat, Oman

Massive assignee departures are being driven by government mandates to fill expatriate positions with Omani nationals while visa restrictions are preventing new assignee arrivals. In addition, the economy has slowed due to the coronavirus pandemic’s effect on the oil and gas industry. Rents are down and many landlords are willing to negotiate.

Manhattan, NY

Manhattan has seen an exodus of executives due to the coronavirus pandemic. Demand and rents dropped for high-end rentals as many executives relocated to suburban areas since they are no longer required to work in downtown offices. Since social distancing is more difficult in high-rise apartments, these buildings often have many vacancies, and construction of new buildings has slowed. Previously unseen concessions have appeared for some vacant units, such as 1-2 month’s free rent and waived fees.

San Francisco, CA

Rents dropped as supply increased in central city areas. New construction of high-end rentals entered the market as renters fled the inner city due to the coronavirus pandemic, contributing to the high supply. Many landlords and management companies have lowered asking rents. Others are offering incentives such as 1-2 month’s free rent, upgraded appliances, and waived agent’s fees.

Sydney, Australia

Rents in inner-city Sydney fell more significantly than in the suburbs as tenant preference shifted from apartments in metropolitan areas toward houses in suburban areas. Rents are more stable at the lower end of the market due to increased competition for more affordable homes, while rents have fallen more steeply at the high end of the market due to oversupply. Many former Airbnb hosts are advertising their properties as long-term rentals, adding to an already increasing supply.

Jakarta, Indonesia

Jakarta rents fell due to low demand and high supply. Apartment rents decreased more significantly than rents for single-family houses since the supply of apartments is growing while home supply remains limited. Some luxury apartment complexes have maintained higher rents as landlords opt to offer incentives to prospective tenants such as free internet or new furniture. There are fewer expatriate arrivals and most incoming assignees are not traveling with their families.

Goods and Services Update

Highlights from our in-depth research

Saudi Arabian Value Added Tax
Domestic Help Transportation In Brazil
Economic Instability in Lebanon


The United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) were the first Gulf states to introduce a value added tax (VAT) on January 1st, 2018. The VAT applied to most goods and services, although certain categories or items, such as some medications, are either exempt or zero rated. On May 10th, 2020 the Ministry of Finance of the KSA announced that the VAT would increase from a rate of 5% to 15% effective July 1st, 2020. This is the first GCC country to announce such an increase and comes as a result of a low consumer spending, higher costs related to the pandemic, and low oil prices affecting revenues.

While many people might expect the cost of living to increase by 10% overnight, AIRINC has found with experience that the inflationary impacts of VAT changes are not always immediate or to the same extent as the increase. The degree to which the consumer prices increase depends on a variety of factors. Some of these include the percent of the market basket impacted by the VAT, the amount of competition in a particular market, the price elasticity of demand in the market, and price adjustment costs. It often takes time for the impact of a VAT change to work its way through a market. This quarter, AIRINC researched multiple cities in KSA and found a spike to inflation directly attributed to the VAT increase. However, we found that the rate of the increase varied by category and that the overall increase was less than the 10% increase to the VAT. AIRINC will conduct additional research in February 2021 to capture any further inflation.


Brazil has been hit hard by the coronavirus, with the largest total number of cases in Latin America and one of the highest per capita mortality rates in the world. While case numbers have come down from their late-July peak, there is a long way to go before containment is achieved. As in many countries with a high risk of transmission, families are using their own strategies to minimize exposure. During AIRINC’s data collection this quarter, we heard that some families who employ domestic help workers are now paying for their cleaner or nanny to take a taxi or ride share service instead of the bus. Other sources also report that some families are having their employees stay with them during the work week rather than traveling to and from the worker’s neighborhood each day. As expatriates adapt to the new realities of the pandemic as they evolve, this additional expense may help to buy some peace of mind.


Lebanon’s economy was struggling before the catastrophic explosion on August 4. Severe cash shortages, a widening gap between official and parallel market exchange rates, increasing poverty rates, high unemployment, and periods of high protest activity have impacted Lebanon over the past year. Inflation is high and many assignees have to use unfavorable rates when purchasing at least a portion of their goods. AIRINC’s research found that many retailers were quoting prices in a combination of both USD and LBP, and some only in USD. Retailers are eager to accept physical US dollars if they can get them, and inflation of the local currency means prices in local currency need to be adjusted frequently. The official exchange rate is 1505 LBP to 1 USD while banks and money changers can exchange at a specialty rate of 3,900 LBP/USD (if they have access to the funds to do the exchange) and the rate on the parallel market has climbed to 8,000 LBP/USD. With physical currency in short supply, many assignees need to rely on card transactions—many of which must use the outdated and overvalued rate of 1505 LBP/USD. With the resignation of Prime Minister Hassan Diab shortly after the port explosion and the resignation of the temporary PM Mustapha Adlib in late September, the economy will continue to be complicated by high inflation and multiple exchange rates.

Goods and Services Inflation

Selected locations with inflation higher than 5% for 6 months

Accra, Ghana

Beirut, Lebanon

Buenos Aires, Argentina

Jeddah, Saudi Arabia

Lagos, Nigeria

Luanda, Angola

Caracas, Venezuela

Selected 3-month Exchange Rate fluctuations of more than 6%

Zimbabwe

Currency ZWL
Change vs EUR -71.3%
Change vs USD -69.7%

Syria

Currency SYP
Change vs EUR -61.2%
Change vs USD -59.2%

Venezuela

Currency VES
Change vs EUR -47.9%
Change vs USD -45.1%

Turkey

Currency TRY
Change vs EUR -13.3%
Change vs USD -8.8%

Zambia

Currency ZMW
Change vs EUR -12.8%
Change vs USD -8.1%

Belarus

Currency BYN
Change vs EUR -12.7%
Change vs USD -8.1%

Argentina

Currency ARS
Change vs EUR -12.0%
Change vs USD -7.5%

Russia

Currency RUB
Change vs EUR -11.9%
Change vs USD -7.3%

Ethiopia

Currency ETB
Change vs EUR -10.7%
Change vs USD -6.0%

Kyrgyzstan

Currency KGS
Change vs EUR -10.3%
Change vs USD -5.6%

Indonesia

Currency IDR
Change vs EUR -9.8%
Change vs USD -5.1%

Kazakhstan

Currency KZT
Change vs EUR -9.7%
Change vs USD -4.9%

Democratic Republic of Congo

Currency CDF
Change vs EUR -9.1%
Change vs USD -4.4%

Ukraine

Currency UAH
Change vs EUR -9.1%
Change vs USD -4.3%

Paraguay

Currency PYG
Change vs EUR -8.8%
Change vs USD -4.0%

Angola

Currency AOA
Change vs EUR -8.3%
Change vs USD -3.6%

Costa Rica

Currency CRC
Change vs EUR -8.3%
Change vs USD -3.5%

Mozambique

Currency MZN
Change vs EUR -8.2%
Change vs USD -3.4%

Nicaragua

Currency NIO
Change vs EUR -7.6%
Change vs USD -2.9%

Jamaica

Currency JMD
Change vs EUR -7.3%
Change vs USD -2.5%

Brazil

Currency BRL
Change vs EUR -7.0%
Change vs USD -2.3%

Georgia

Currency GEL
Change vs EUR -7.0%
Change vs USD -2.2%

Peru

Currency PEN
Change vs EUR -6.9%
Change vs USD -2.0%

Rwanda

Currency RWF
Change vs EUR -6.8%
Change vs USD -2.0%

Malawi

Currency MWK
Change vs EUR -6.7%
Change vs USD -1.9%

Guinea

Currency GNF
Change vs EUR -6.7%
Change vs USD -1.9%

Kenya

Currency KES
Change vs EUR -6.7%
Change vs USD -1.8%

Mongolia

Currency MNT
Change vs EUR -6.6%
Change vs USD -1.8%

South Sudan

Currency SSP
Change vs EUR -6.3%
Change vs USD -1.4%

Uzbekistan

Currency UZS
Change vs EUR -6.2%
Change vs USD -1.3%

Laos

Currency LAK
Change vs EUR -6.1%
Change vs USD -1.2%

Papua New Guinea

Currency PGK
Change vs EUR -6.2%
Change vs USD -1.2%

Australia

Currency AUD
Change vs EUR 0.9%
Change vs USD 6.1%

Country Tax Update

Changes in expatriate tax

Egypt
Iran
Mauritius
Zimbabwe

Egypt

Effective July 1, 2020 Egypt introduced new progressive tax rates. The top marginal rate is unchanged at 25%, but the benefit of lower tax brackets is phased out as income increases. The annual personal allowance increased, and the tax credit was eliminated.  Egypt also adopted extensive changes to the social security system, consolidating several different social programs into one system, and applying one contribution rate of 11% to the social security wage base. The net effect varies by income. Generally lower income taxpayers will pay less in tax and social security, and higher income taxpayers will pay more in tax and social security.

Egypt introduced a new Solidarity Contribution on net employment income and pension income, effective for a 12-month period beginning August 14, 2020. The new tax is scheduled to end August 13, 2021. For employment income, the solidarity contribution rate is 1% of net employment income after deducting social security and regular income tax. The contribution does not apply to employees with net employment income of EGP 24,000 or less per year.

Iran

Family allowances and the maximum contribution to social security increased. The tax rate schedule was adjusted, with the top marginal rate decreasing from 35% to 25%. The net effect is a decrease in income tax for all taxpayers, and an increase in social security at high incomes.

Mauritius

General exemptions and maximum social security contributions increased. The solidarity levy rate for Mauritian citizens increased from 5% to 25% on incomes exceeding MUR 3,000,000. The net effect is a decrease in tax at lower incomes and a large increase in tax at high incomes. The levy rate remains 5% for non-citizens, and it is expected that the higher 25% levy for citizens will be temporary.

Effective September 1, 2020, the National Pension Fund is being abolished and replaced with a new scheme called Contribution Sociale Generalisee (CSG). CSG contributions vary by income, with an employee contribution of 1.5% for monthly income up to MUR 50,000, and 3% if monthly income exceeds MUR 50,000. The net effect of the CSG scheme is an increase in social security for most taxpayers.

Zimbabwe

Zimbabwe made a bold move in attempting de-dollarization in 2019, reinstituting the Zimbabwe dollar and banning almost all use of US dollars. The currency has depreciated continuously, a condition made worse by the current global upheaval. In late March, it was announced that the Zimbabwe dollar would be pegged to the USD at a rate of 25 ZWL, and Zimbabwe would again permit foreign currencies for domestic transactions. De-dollarization in Zimbabwe has been blamed for rapidly climbing inflation, with March 2020 inflation over 675%.

Locals are almost all paid in local currency, but some are protesting to be paid in USD due to the collapse of purchasing power. Before the foreign currency ban, assignees were paid in USD. After the ban but prior to the current crisis and de facto re-dollarization, assignees were likely to be paid in a combination of hard currency and some local currency. Now, some companies may have gone back to paying in all hard currency, but many are likely still splitting between hard and local currency.

Since a devaluation in March, monetary policy in Zimbabwe has kept the official exchange rate of the Zimdollar fixed despite market forces, leading to a widening gap between the parallel market rate. That fixed rate was scrapped in June, when the Reserve Bank of Zimbabwe launched a foreign currency auction platform to meet currency needs and determine the currency’s official rate. The currency depreciated sharply as a result of its first two auctions. Further depreciation is expected as auctions continue and market forces determine an appropriate value for the currency. The rule restricting foreign currency use has now been rolled back and replaced with a 5-year de-dollarization plan that projects interchangeable use of foreign currencies and the Zimdollar.

The Zimbabwe standard tax model is now provided in ZWL, while AIRINC also maintains a USD variant. The Zimbabwe Revenue Authority published 2020 tax tables in both ZWL and USD, and it is expected that an employee that earns income in both currencies will calculate tax using the USD tax table with the ZWL portion converted at the interbank prevailing rate on the date of receipt.

In addition to the above, the National Social Security Scheme (NSSS) rate increased from 3.5% to 4.5%, and the maximum annual contribution increased slightly. The net effect is a small increase in social security for all taxpayers, while income tax changes will vary depending on pay currency splits and exchange rate fluctuation in 2019 and 2020.

Research Location Update

Q3 Researched Locations and Upcoming Q4 Locations

AIRINC researches more than 150 locations each quarter.

Q.3 Researched Locations
Q.4 Upcoming Locations

In response to market volatility, we will also conduct updates in Buenos Aires and Caracas in the fourth quarter.

Make quicker decisions with access to country/city reports for education costs, tax implications, transportation information, and assignment location summaries.

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