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Dick Turpin

Costs Vary Widely for Expatriates

October 26, 1986|Dick Turpin

Homes and cars are the two most expensive purchases for most families, but for Americans who live abroad there is a wide discrepancy in paying for their chosen life styles.

There is no pat formula, even though an individual or family may earn identical salaries (in dollars) and live in Sydney, Australia, or Athens, Greece, or Bogota, Colombia.

These families include representatives of such American companies or products as cars, soft drinks, food, banking, oil and construction.

Newly completed research by a management consulting firm specializing in living costs and travel offers some comparisons and warns that you can pay more, and have less, for both your home and your car.

In Bogota, for instance, an American family of four, with an income of $80,000, could live in a 4,000-square-foot attached house with eight rooms, including four bedrooms. It would own a 1986 Renault 18GTX and probably chalk up annual mileage of 11,200.

A family of two on a salary of $40,000 could afford a five-room apartment of 1,507 square feet, have a 1986 Mazda 323 and drive it the same distance.

But if those same family units were transferred by their corporations to Al Khobar, Saudi Arabia, there would be some major changes for the four-member family, not very much for the smaller family.

The $80,000 group would have to make do with only 2,260 square feet squeezed into a nine-room detached dwelling. They would be driving a 1986 Buick Park Avenue, for 18,600 miles in a year.

The $40,000 family would live in a six-room, 1,506-square-foot detached house but would have a 1986 BMW 316 and drive it 18,600 miles too.

Neil B. Krupp, vice president of international services for Runzheimer International, a Rochester, Wis., management consulting firm, says:

"It is very important to replicate actual living conditions when costing (estimating) life styles in various locales. What is typical for one place is atypical in another.

"When American employees are asked to transfer with their families to far-flung destinations, both they and their employer need precise cost information based upon actual expenditures typical for that income level. You can actually pay more for less in many instances."

His firm consults with more than 2,000 clients worldwide on employee relocation, living costs and site selection.

Krupp looked into five international locations to show what the typical residence arrangements would be for an American individual or family living/working abroad.

The minimum housing listed are five-room dwellings--an apartment, a detached house or an attached dwelling. It could contain a minimum of 1,345 square feet (Athens) or a maximum of 2,400 (Hong Kong). In both those cities, the units cited are apartments.

The $40,000-income family in Athens most likely would be driving an Audi 80CC, for 10,900 miles, while the occupants of the $80,000-income family home would also have an Audi--100CC--but a seven-room, 2,691-square-foot attached or detached home.

In Hong Kong, the two car choices are Accord Ex (6,000 miles) and Nissan Laurel, (also 6,000 miles). The housing categories are six rooms, 2,400 square feet, and seven rooms, 2,900 square feet for the respective salary differences.

In Sydney, a detached house (for a typical occupant who drove a new Ford Falcon GL, 12,400 annual mileage), would provide housing for the $40,000-a-year-income tenant, offering five rooms in a 1,600-square-foot detached home. The $80,000-a-year counterpart could afford an eight-room detached house containing 2,400 square feet.

The family car? A 1986 Mercedes 190E that would also be driven 12,400 miles.

The Krupp data does not include prices of homes or cars but a parallel study by Business International, a Geneva-based consulting firm, shows that Japan is the most expensive nation for expatriates.

Based on an index figure of 100 for New York in July, Tokyo registered 189 and Osaka was second with 183. Iran's capital of Tehran is third with 164. Tokyo had been at 155 on the index only last April.

Listed last at 39 on the index is Caracas, capital of Venezuela. Geneva was 10th, at 117, replacing Oslo as the most expensive European city.

Tied with New York at 100 is San Francisco, falling from its previous ninth place to 19th. Chicago at 98, was 26th.

Los Angeles didn't get a call.

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