A majority of expats are saving more than they did in their home country.

Expats come in all shapes and sizes, but surveys have shown a few characteristics stand out. For a long time, expats have tended to be better educated and wealthier than other target groups. However, recent data suggests that there is also a shift of wealth – away from traditional expat markets towards emerging markets.

Indeed, HSBC’s 2010 Expat Explorer Survey found growing markets for luxury goods in emerging economies such as South Africa and the UAE. According to the HSBC data, 61% of expats reported they were saving more than in their home country, though interestingly another 43% said they were also spending more and 38% that they were investing more.

There could be two reasons for this: 1) that expats are earning better salaries abroad than at home, and 2) cost of living may be cheaper abroad. The latter is particularly true of the emerging Asian economies that play host to many expat assignments.

While 20% of expats said they were using their earnings abroad to pay down debt, only 5% said they were accumulating more debt–another sign that sound financial management goes hand-in-hand with expat life.

As for how expats are spending that extra cash, HSBC’s survey showed demand for luxury goods (larger properties, nicer cars, swimming pools, etc) among expats remains strong in emerging economies. Sorted by these criteria, the top expat markets for luxury goods were:

  1. Bahrain
  2. South Africa
  3. Thailand
  4. United States
  5. UAE

Spain, interestingly enough, ranked 8th, though other western European nations such as France (#13), Switzerland (#19), the Netherlands  (#21), Germany (#22) and the UK (#25) placed considerably lower.

A retired UK expat living in Thailand commented that he was pleased to have “a larger house, a better standard of living and less UK government interference” while living abroad.

To draw a broad conclusion, expat wealth is now migrating from developed economies into emerging markets, as is expat demand for higher end property and luxury goods.