The pandemic launched an exodus of expats, and for many it’s come with an unexpected financial burden.
Whether it’s because of tight Covid restrictions, separation from family or the frustration of closed borders, a growing number of people living abroad have made the choice to move closer to home. In the process, they’re facing the reality of inflation and pandemic-related transportation snags, not to mention the possibility of lower-paying jobs and higher taxes in their new location.
Take Clement Burge. The Swiss video producer, 33, was fed up with Hong Kong’s ultra-strict Covid rules and was willing to make financial sacrifices to be closer to his extended family in Europe. Still, he wasn’t prepared for just how much his quality of life would change.
Burge moved to London in October with his wife and four-year-old daughter after living in Hong Kong for six years. Although he doesn’t regret the move, the change was costly.
The family spent about HK$27,000 ($3,400) to ship their couch, a carpet and his daughter’s toys to the UK, and the visa costs for him and his daughter came to about 8,000 pounds ($10,000). They spent another 3,000 pounds to buy new furniture once they arrived.
London life is also dearer than Hong Kong, with Burge estimating they spend an additional 830 pounds every month due to higher rent, childcare and cleaning expenses.
Burge also feels the impact on his take-home pay after moving from a low-tax jurisdiction to one where taxes come up to about 40%.
“Life in London is very expensive, especially with a child,” he said, adding that the family’s lifestyle has changed. “In Hong Kong, it’s 20 degrees Celsius half the year. We used to buy our cheap local fish on our tiny island from the local fishermen and other fresh food. It was ideal. We had a full-time nanny. Here it’s very different.”
Burge is part of a global trend. In Hong Kong, which has had some of the strictest Covid restrictions in the world, new visas issued to foreign financial-service workers fell 50% in 2021 from 2018 levels. The number of expat white-collar workers in Singapore fell 9% last year to the lowest in more than a decade. In South Korea, the number of foreign nationals dropped 23% in 2021 from two years prior.
The trend is still continuing this year. In Oman, the expatriate population accounted for 39% of the total population as of Apr. 9, down three percentage points from the level in early 2020. In the UK, where Brexit has compounded the difficulties for foreign workers, there were 1.3 million visas granted last year, 59% fewer than 2019.
Overall, many companies are posting fewer workers abroad this year compared to before the pandemic.
“People who lived a dozen hours away from their native homes have been looking to move back,” said Kate Everett-Allen, head of international residential research at real-estate consultancy Knight Frank. She added that markets with strict lockdowns, like Australia and New Zealand, saw particularly strong demand from people wanting to leave.
Many expats will have to swallow bigger-than-expected bills to make it home. The cost of an international flight for US travelers was 22% higher in April compared to the same month last year, according to flight tracker Hopper.
And for those looking to ship their possessions, the cost of a 40-foot container box was up 60% in the week ending April 21 from the same week last year, according to international maritime consultancy Drewry. Someone shipping a container to New York from Shanghai would now pay $11,229, up from $6,255 a year prior.
Quality of Life
Closed borders and travel restrictions made many expats realize that being closer to their families was essential. And for some, the higher costs of returning home are worth it.
Sophie Pasquier, 37, left Singapore after seven years for Paris last June, when Covid restrictions got too tight. With a sick mother-in-law back home in France, Pasquier was facing a tough choice. If she visited, she’d need to quarantine for two weeks on the way back to Singapore and wouldn’t be able to work from abroad in the meantime, as her company didn’t allow that.
Pasquier switched jobs and was able to keep the same income as her previous job, but lost out significantly on taxes: in Singapore, they were almost non-existent. In France, they’re close to 40%. Still, Pasquier doesn’t regret her choice.
“Here we get our freedoms back,” she said. “We can meet our friends, go to restaurants, have gatherings at home — that’s priceless.”
For Yuqing Li, 28, leaving Boston and moving back to China was worth the cost. Stuck in a small two-bedroom apartment with her roommate during the 2020 lockdown, the marketing specialist was homesick. She spent $2,200 on her plane ticket last September, $450 to send her boxes home and $440 for two weeks’ hotel quarantine in China.
Li now lives by herself in a two-story studio in Guangzhou. She pays 4,000 renminbi (about $600) a month for it, instead of the $1,000 for her room in Boston. She’s found another job as a marketing specialist and is happy to be closer to family.
“I’m so glad to have Chinese food again,” she said.
Leaving in a Rush
Still, some have been stressed by the pandemic-related strains on purse strings and schedules that relocating involves.
Lewiston, Maine-born single mother Jessica Kuwata is worried about the costs of leaving Hong Kong after 12 years, but said she doesn’t have much choice.
Raising three kids on the island became difficult because schools shut down for close to two years and strict Covid rules restricted movement. The English teacher expects her move to Boston to cost about $10,000, including shipping costs for a few personal items, flight tickets, lost deposits on rent and the cost of new furniture.
“I’ll have to buy all of that back once I’m in the US,” she said.
Kuwata has been living frugally to save for the move. But she was forced to continue teaching in Hong Kong until mid-August after the school year was extended. That pushed her move back by two weeks, costing HK$13,600 ($1,700) extra on plane tickets, plus changes to a car rental and hotel-room reservation in the US.
“Government rules have been changing constantly. And each time they do, I have to change my plans, and that always comes at a cost,” she said.