Q.2 2025

Data Points

A Selection of AIRINC Research Results

This quarter’s cost-of-living research was conducted primarily in Europe, Asia, and mainland Southeast Asia.

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Housing Update

Snapshots of expatriate-quality rental markets around the world

Astana, Kazakhstan

Budapest, Hungary

Chennai, India

Dhaka, Bangladesh

Istanbul, Turkey

Moscow, Russia

Shanghai, China

Tel Aviv, Israel

Tianjin, China

Yokohama, Japan

Kazakhstan country in blue

Astana, Kazakhstan

Astana rents have risen sharply, driven by currency devaluation, business relocations from Almaty, and an influx of expatriates from Europe, China, and the Middle East. Central apartments attract junior executives, while senior expatriates prefer suburban areas like Karaotkel and Chubary. Demand remains strong, and rents are expected to continue climbing in the coming year.

Budapest, Hungary

Rents in Budapest have steadily increased, especially in high-demand districts, driven by rising costs and a shift of some properties to short-term rentals or sales. Expatriate-friendly homes are quickly rented when well-located and priced, particularly in Districts II, XII, V, VI, and XIII. With limited new construction and steady demand, rents are expected to continue rising over the next year.

India country in blue

Chennai, India

Chennai’s rental market has risen steadily in recent months, driven by domestic economic growth from the manufacturing sector and returning Indian nationals. Vacancy remains moderate, though construction costs are rising and some properties still fall short of expatriate expectations. Expatriate demand—particularly in areas like Alwarpet, R.A. Puram, and select compounds such as Ceebros One 74—is expected to sustain current rental trends.

Bangladesh country in blue

Dhaka, Bangladesh

Dhaka’s rental market continues to rise steadily, supported by improved political stability and sustained demand from regional and international projects. Expatriates from Japan, Russia, India, and China are driving activity, particularly in premium areas like Baridhara and Gulshan. These neighborhoods remain top choices for their security, infrastructure, and quality housing. New developments are targeting high-end expatriate needs, with no major changes to rental fees or regulations.

Turkey country in blue

Istanbul, Turkey

Istanbul’s rental market continues to tighten, with rising rents and limited availability of expatriate-quality units, particularly in sought-after areas like Suadiye. High turnover and low vacancy keep competition strong, while rising utility and management costs add to overall housing expenses. Regulatory shifts and economic uncertainty may push rents even higher, despite currency advantages for expatriates.

Russia country in blue

Moscow, Russia

Inflation in Moscow continues to rise, though less sharply than in 2024, with price increases mostly affecting new builds in the city center. The removal of government-subsidized mortgage programs has slowed the pace of buyers entering the market. Rental demand still outpaces supply. Vacancy remains low, and the city center is still the most desirable area for renters.

China country in blue

Shanghai, China

The Shanghai rental market has seen a drop in recent months, which is largely attributed to more expatriates leaving the city than arriving, reducing overall demand. Deteriorating U.S.–China relations have made major corporations more hesitant to invest or expand operations internationally.

Tel Aviv, Israel

Rental prices in Tel Aviv continue to rise despite limited expatriate demand, driven by a shortage of modern, secure properties and broader economic pressures. Expatriates prioritize new builds with private shelters, which are scarce due to slowed construction and a reduced labor force. Ongoing instability and increased local rental demand have further tightened the market, with prices expected to keep climbing.

China country in blue

Tianjin, China

The expatriate rental market in Tianjin has seen a decline over the past year. This trend is primarily driven by reduced demand from a shrinking expatriate population as foreign companies are increasingly reluctant to send employees due to the global economic downturn, political uncertainties, slowing business activity, and rising living costs.

Japan country in blue

Yokohama, Japan

The long-term expat rental market in Yokohama has grown due to increased international business activity and the city’s appeal as a convenient, lifestyle-rich alternative to Tokyo. Strong demand from relocating professionals tightened supply, especially in areas like Minato Mirai and Yamate. A weaker yen has also made rents more attractive to foreigners. With low vacancy and high turnover, rents continued to rise over the past six months.

Goods and Services Update

Highlights from AIRINC’s in-depth research
Japanese Rice Shortage
Hongkong Post Suspends U.S. Package Shipments

Starting with a severe heatwave in 2023, Japan has been struggling with a significant rice shortage. This shortage has led to a dramatic increase in prices, making rice a commodity in a country where it is both culturally important and vital to national security. Government policies regarding rice production have largely remained unchanged, including a refusal to increase production levels and a continued rejection of offers to import rice. Traditionally, there has been a strong preference for domestically grown rice in Japan, and the government is hesitant to rely on foreign supplies.

As these agricultural policies hinder the rice industry, fewer people choose to pursue farming. The profession has become less appealing compared to the more lucrative options available in urban areas. Future predictions for the rice industry indicate a pressing need to revise agricultural policies to allow for greater production and increased rice imports. While artificially fixing prices is an option, this is not widely favored and is expected to lead to further complications. Therefore, the first two strategies of increasing production levels and importing rice are preferable for lowering prices and boosting supply.

Hongkong Post, the government department responsible for postal services in Hong Kong, has suspended all package shipments to the United States. This decision follows the implementation of new U.S. tariffs on May 2, including the elimination of the “de minimis” exemption, which allowed goods worth under $800 to enter the U.S. duty-free. While the suspension affects all package deliveries, Hongkong Post will continue delivering document shipments to the U.S. Residents will have to use private companies for package delivery, which might have higher costs.

Goods and Services Inflation

Selected locations with inflation higher than 5% for 6 months
Azerbaijan
Kazakhstan
Moldova flag
Moldova
Mongolia
Myanmar flag
Myanmar
Northern Cyprus flag
Northern Cyprus
Poland
Turkey
Ukraine

Selected 3-month Exchange Rate fluctuations of more than 5%

Argentina

Currency: ARS

Change vs EUR: -17.2%

Change vs USD: -9.2%

Ethiopia

Currency: ETB

Change vs EUR: -14.4%

Change vs USD: -6.1%

Ghana

Currency: GHS

Change vs EUR: 37.6%

Change vs USD: 51.1%

Libya

Currency: LYD

Change vs EUR: -18.3%

Change vs USD: -10.3%

Northern Cyprus

Currency: TRY

Change vs EUR: -15.7%

Change vs USD: -7.6%

Suriname

Currency: SRD

Change vs EUR: -15%

Change vs USD: -6.6%

Turkey

Currency: TRY

Change vs EUR: -15.7%

Change vs USD: -7.6%

Venezuela

Currency: VES

Change vs EUR: -60.9%

Change vs USD: -57%

Zambia

Currency: ZMW

Change vs EUR: 6.1%

Change vs USD: 16.4%

Country
Tax Update

Changes in expatriate tax

Australia

Bulgaria

Latvia

Malaysia

Panama

Spain

Tunisia

Australia

The 2025/2026 budget for Australia was delivered on March 25th, 2025. Australia proposed tax relief for individuals beginning next year, 2026/2027, and the following year, 2027/2028. There are no changes in tax rates and brackets for 2025/2026. The employer-paid superannuation rate increased from 11.5% to 12% for the 2025/2026 tax year, and the maximum annual superannuation contribution increased from AUD 29,932 to AUD 30,000. The superannuation rate has been increasing incrementally by 0.5% every year, and this is the final announced increase. The family allowances (Family Tax Benefits Part A and Part B) increased. The net effect of these changes is no change in tax for all taxpayers, an increase in family allowance for middle-income families with children, and an increase in employer social security contributions.

There are additional changes announced that will impact the tax treatment of Superannuation Funds in future years. Beginning with the 2026/2027 tax year, “Payday Super” rules will be implemented. Under Payday Super, employer contributions to Superannuation must be made at the same time as when salary and wages are paid. This is intended to reduce unpaid mandatory contributions and strengthen the Superannuation system. The budget also includes a provision to address housing affordability: Foreign persons, including temporary residents, will generally not be able to purchase existing residential housing from April 1, 2025 to March 31, 2027.

Bulgaria

The maximum annual contribution to social security increased from BGN 6,201 to BGN 6,829. The net effect is a small increase in social security for most taxpayers, and a small decrease in income tax, as social security is deductible.

Bulgaria was previously scheduled to join the Eurozone in 2025 but has experienced multiple delays due to political turmoil and failing to meet Bulgarian lev (BGN) inflation targets. Reuters reports that Euro zone finance ministers confirmed that Bulgaria has met the criteria required to be the 21st country to join the single currency area, with an anticipated Euro adoption date of January 1, 2026.

Latvia

The maximum annual contribution to social security increased from EUR 8,201 to EUR 11,057. The income-tested non-taxable minimum was replaced with a flat personal allowance. The tax rate schedule was adjusted, with the three progressive income tax rates increasing from 20%, 23%, and 31% to 25.5%, 33%, and 36%, respectively. The net effect varies by income, but generally there is an increase in social security and income tax at middle and higher incomes.

Malaysia

There have been minor adjustments to deductions and social security maximums. Most taxpayers will see a small decrease in income tax and a small increase in social security.

Separately, Parliament approved an amendment to the Employees’ Provident Fund (EPF) Act that will require foreign employees and employers both to contribute to the scheme at a rate of 2%. Foreigners were previously exempt from the EPF contributions. The amendment is expected to gain final approval via Royal Assent shortly. As Malaysia does not currently have any Totalization Agreements in force, Global Mobility should anticipate an increase in costs for all inbound Malaysian assignments.

Panama

There are no changes to individual taxation for 2025. However, effective March 18, 2025, the employer social security rate (including the educational tax) increased from 13.75% to 14.75%. The rate is scheduled to increase by 1% on March 1, 2027, and again on March 1, 2029.

Panama announced the elimination of the defined benefit plan for individuals who were under 35 years old on January 1, 2006, or who joined the system for the first time after that date. The retirement age remains 57 years for women and 62 years for men. As of 2036, Panama will no longer grant old-age-defined benefit compensation but will instead calculate retirement pension based on accumulated contributions in individual accounts. A non-contributory solidarity component will grant a minimum pension to individuals who were unable to make sufficient contributions during their working ages. Among other political issues, the change to the retirement system has sparked ongoing protests throughout Panama.

Spain

The social security contribution rates and maximums increased slightly. In addition, Spain introduced a new Solidarity contribution applicable to workers who exceed the maximum contribution base (EUR 4,909.50 per month for 2025). There are three progressive income ranges that apply a different rate:

  1. First range: 0.92% from EUR 4,909.50 – EUR 5,400.45
  2. Second range: 1% from EUR 5,400.45 – EUR 7,364.25
  3. Third range: 1.17% EUR 7,364.25 to no ceiling

83.39% of the contribution is payable by the employer, and 16.61% is payable by the employee. The wage tranches and percentages will increase each year until 2045, when the rates will be 5.5%, 6%, and 7%.

The national and Madrid tax rate schedules are unchanged; however, the Barcelona regional tax brackets have been adjusted. The net effect is an increase in social security and a small decrease in tax for most taxpayers.

Tunisia

The tax rate schedule has been substantially revised, previously ranging from 26.5% to 35.5%, and now 15.5% to 40%. The social security rate increased from 9.18% to 9.68%. The net effect is an increase in social security for all taxpayers, a decrease in tax at lower incomes, and an increase in tax at middle and high incomes.

Research Location Update

Q2 2025 Researched Locations and Upcoming Q3 2025 Locations

AIRINC researches more than one hundred fifty locations each quarter.

Q.2 2025 Researched Locations
Q.3 2025 Upcoming Locations

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