World Cost of
Living 2012: Tokyo is the world’s most expensive city for expatriates,
pushing Luanda, Angola, down to second position, according to Mercer’s
latest Cost of Living Survey. Osaka is in third position, up three
places from last year, whereas Moscow remains in fourth and Geneva in
fifth positions. Singapore and Zurich share sixth place, up two and one
places respectively since 2011. Ndjamena, Chad, drops five places, but
Hong Kong retains its ninth place. Dublin, Ireland fell 14 places to a
72 ranking while changes in exchange rates impact the rankings.
Karachi (214) is
ranked as the world’s least expensive city for expatriates, less than
one-third as expensive as Tokyo. Recent world events, including economic
and political upheavals, have affected the rankings for many regions
through currency fluctuations, inflation, and volatility in
In the UK, London
(25) is the most expensive city for expatriates, down seven places from
last year. At 133, Birmingham is up 17 places, having overtaken Aberdeen
(144) and Glasgow (161). Belfast (165) is the UK’s least expensive city,
up 13 places in the ranking since 2011.
The survey covers
214 cities across five continents and measures the comparative cost of
over 200 items in each location, including transport, food, clothing,
household goods and entertainment. The cost of housing is also included
and, as it is often the biggest expense for expatriates, it plays an
important part in determining where cities are ranked. Mercer's
cost-of-living survey is designed to help multinational companies and
governments determine compensation allowances for their expatriate
employees. New York is used as the base city and all cities are compared
against it. Currency movements are measured against the US dollar.
The Wall Street Journal reports that according to data
from the Bank of Japan, the average dollar rate for the survey’s most
recent period through February 2012 was ¥78.9, an 8.6% decline from the
Japan hasn’t been a cheap place to live for a long, long
time. This was the 12th year Mercer ranked Tokyo most expensive city
since 1994, including four years running through 1997, when the dollar
averaged ¥122.9. Even when it hasn’t been No. 1, Tokyo has ranked among
the top three every year except 2007, when it dipped to fourth.
To be sure, living in Tokyo doesn’t need to break the
vault. There are ways to bargain-bin your way through the daily grind,
with ¥500 lunch boxes, living in smaller accommodations outside of the
city center, and avoiding taxis at all costs.
But costs for even smaller items can pinch. According to
Mercer, you can buy two cups of coffee in New York for what it costs to
buy one in Tokyo - - $8.29. That is more than any other major Asian city
ranked in the top 10.
Tokyo is also the most expensive place to watch a
movie. Admission is an average of $22.97, about $3 more than in Sydney,
the next most costly city to catch a film.
Yet Tokyo real estate is a steal compared with Hong Kong
and Luanda, where the monthly rents for a luxury two-bedroom unfurnished
apartment are $7,092 and $6,500, respectively. Still, Tokyo’s average
monthly rent — $4,847 — is the third-highest, even as rental prices have
fallen “as people relocated from the affected area to the south of
Japan” following last year’s earthquake and tsunami disasters.
In Paris, the rent on an unfurnished, two-bedroom luxury
property fell 3% to $3,041, according to Mercer. Rental costs in Rome,
Berlin and Madrid were also down.
But, perhaps the biggest impact on prices has been the
exchange rate. The euro has fallen 16% since its peak in May. That
translates into a 16% discount for staff and companies operating in the
Rising Asian costs
In comparison, the relative boom in many Asia-Pacific
economies has pushed up bills for expats based in the region.
In Shanghai, spending on accommodation has risen 73%.
Rents in the world's most expensive property market, Hong Kong, rose 23%
to $7,039 for a two-bedroom apartment. Rents in Beijing were up 15%.
Mercer based its findings on prices gathered between
March 2011 and March 2012.
During that time, strong swings on the currency markets
have been bad news for overseas companies operating in Asia, especially
those who receive most of their income in euros.
The Economist ranks
Australia as having among the most overvalued property markets.
Over the 12 months to June, the Australian dollar traded
between US95¢ and $US1.10, well above its long-term average.
A pair of jeans costs $150 in Tokyo, $174 in Luanda
while expats in Moscow pay about $9.60 for an international newspaper.
Constantin-Métral, principal at Mercer, is responsible for compiling the
ranking each year. She commented: “Deploying expatriate employees is
becoming an increasingly important aspect of multinational companies’
business strategy, including expansion. But with volatile markets and
stunted economic growth in many parts of the world, a keen eye on cost
efficiency is essential, including on expatriate remuneration packages.
Making sure salaries adequately reflect the difference in cost of living
to the employee’s home country is important in order to attract and
retain the right talent where companies need them.”
“When compared to
New York, our benchmark city, most European cities have witnessed a
decline in cost of living. Some exceptions exist where accommodation
prices have increased or additional VAT taxes have pushed the cost of
living up. In North America, most cities have gone up in the ranking, as
the US dollar has strengthened against a large proportion of the world’s
other currencies. In Asia, more than six in ten cities moved up in the
rankings, including all surveyed cities in Australia, China, Japan and
New Zealand. Cities in Australia and New Zealand witnessed some of the
biggest jumps, as their currencies strengthened significantly against
the US dollar.”
Europe, the Middle
East and Africa: At number four in
the global ranking, Moscow remains the most expensive city in Europe for
expatriates. Geneva follows in fifth position and Zurich in sixth (up
one place from last year). The next European city in the ranking, Bern
(14), is up two places from last year, following the strengthening of
the Swiss franc against the US dollar.
With a few
exceptions, the remaining European cities have all dropped in the
rankings, mainly due to a considerable weakening of local currencies,
including the euro, against the US dollar. Oslo (18) is down three
places from 2011, whereas the next European city on the list, London
(25) is down seven places. In 28th position, St. Petersburg is up one
place. Paris (37) is down 10 places, whereas Milan (38), Rome (42),
Stockholm (46), Vienna (48) and Amsterdam (57) are all down from seven
to 13 places. Helsinki (65) and Prague (69) have both slid down the
list, 23 and 22 places respectively. Brussels (71) dropped a more
moderate nine places, followed by Dublin (72) - - down 14 places.
Ranking 207, Skopje, Macedonia, is the least expensive city for
expatriates in Europe.
explained: “Despite some marked price increases across the region in the
first half of last year and widespread increases in VAT charges, most
European cities dropped in the ranking. This is mainly due to the
unstable economic situation across Europe, which has led to the
depreciation of most local currencies against the US dollar. Countries
badly hit by the Eurozone crisis, including Greece, Italy and Spain,
have also experienced drops in rental accommodation prices.”
Tel Aviv (31)
continues to be the most expensive city in the Middle East for
expatriates, despite dropping seven places since 2011. Ranking 67 and up
eight places from last year, Beirut has overtaken Abu Dhabi (76, down
nine places from last year). Jeddah, Saudi Arabia (186), continues to
rank as the least expensive city in the region. “On the whole, most
Middle Eastern cities have dropped in the ranking, mainly because price
increases on goods and services have been more moderate here than in our
benchmark city, New York. Slight decreases in expatriate accommodation
costs were also observed in Abu Dhabi and Dubai,” said Ms
off the top spot on the global list, Luanda, Angola (2), remains the
highest ranking city in Africa. Ndjamena, Chad (8), follows, dropping
five places since 2011. Dropping eight places, Libreville, Gabon (20),
is the next African city on the list, followed by Khartoum, Sudan (26),
which is up 18 places. “It might be surprising to see 20 African cities
in the top third of the ranking. The main driver behind this is the
difficulty finding good, secure accommodation for expatriates. So the
limited supply of acceptable accommodation is very expensive. The cost
of imported international goods is also high, contributing to many
regional cities moving up the ranking,” said Constantin-Métral.
In South Africa,
Johannesburg (154) and Cape Town (179) have fallen 23 and 21 places,
respectively, reflecting the considerable weakening the South African
rand has suffered against the US dollar in the last year. Tunis, Tunisia
(209), remains the least expensive city for expatriates in the region,
down two places from last year.
São Paulo (12) and Rio de Janeiro (13) remain the most expensive cities
for expatriates across both North and South America, and are closely
trailed by Caracas (29), which jumped 22 places since last year. In
South America, Brasilia (45) is now the fourth most expensive city, down
12 places. Dropping from 53rd position, Havana (99) experienced the
largest drop in the region as the US dollar strengthened considerably
against the Cuban peso. At 121, up from 159, Buenos Aires made the
region’s biggest jump up the list following strong inflation, which
considerably increased the cost of goods, and an increase in
commented: “Inflation pressures continued to push some South American
cities up the ranking, whereas for some of the region’s cities,
weakening of the local currencies caused them to rank lower.”
Ranking 33 (down
from 32 in 2011), New York City remains the most costly city in the
United States. Los Angeles (68) and San Francisco (90) are slowly
catching up, however, having jumped a respective nine and 16 places
since last year. Amongst other major US cities, Washington (107) is up
one place, Miami (110) is up five places and Chicago, also at 110, is
down two places. Portland, Oregon (178), and Winston-Salem, North
Carolina (195), remain the least expensive surveyed cities for
expatriates in the United States. Ms Constantin-Métral said: “Although
price increases have remained moderate overall, most US cities have gone
up in the ranking, mainly as a result of the strong US dollar.”
remains the highest ranking city in Canada, closely followed by
Vancouver (63). Montréal (87) has dropped eight places, whereas Calgary
(92) has climbed four.
This year, Tokyo (1) emerged as the most expensive city for expatriates
both in Asia and globally. Climbing three places since 2011, Osaka (3)
is the next Asian city on the list, followed by Singapore (6) and Hong
Kong (9). Nagoya, Japan (10), is up one place, and Shanghai (16) and
Beijing (17) climbed five and three places respectively, overtaking
Seoul (22, down three places). Two more Chinese cities follow: Shenzhen
(30) and Guangzhou (31), up 13 and seven places respectively since 2011.
“The combination of increased prices on goods and a strengthening of the
Chinese yuan has pushed Chinese cities up the ranking. Continued high
demand for accommodation has also led to moderate increases in rental
costs,” said Ms Constantin-Métral.
In India, New
Delhi (113) and Mumbai (114) have dropped considerably – by 28 and 19
places respectively. Elsewhere in Asia, Jakarta (61) is up eight places,
Bangkok (81) is up seven and Kuala Lumpur (102) is up two places.
Hanoi’s position remained unchanged at 136, and Karachi (214) remains
the region’s least expensive city for expatriates.
continue to rank high on the list in the Asia Pacific region and,
following the strengthening of the Australian dollar, have all
experienced further jumps up the global list since last year. Sydney
(11) and Melbourne (15) experienced relatively moderate jumps, up three
and six places respectively, whereas Perth (19) and Canberra (23) both
jumped 11 places. Brisbane (24) rose by seven places, and Adelaide (27)
shot up 19 places. Australia now has three surveyed cities in the top 20
and all six surveyed cities in the top 30. In New Zealand, both Auckland
(56) and Wellington (74) both jumped a very significant 62 places.
“The leap up the
list by cities in New Zealand follows large increases in both
accommodation cost and demand, coupled with a stronger New Zealand
dollar,” explained Ms Constantin-Métral. “Demand for rental properties
has also increased significantly in all the Australian cities we rank.
Coupled with very limited availability, the result has been very tight
markets and increased prices.”
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Top 50 cities: Cost of living ranking Mercer international basket
including rental accommodation costs Base City: New York
- - The triennial Price and Earnings report,
produced by Switzerland's biggest bank was published.
The report ranks the 73 cities across the
globe, in respect of a number of criteria.
banking giant UBS's Prices and Earningsstudy
has dubbed Oslo, Zurich, Copenhagen, Geneva, Tokyo and
New York as the world's most expensive cities based on a
standardized basket of 122 goods and services. When rent
prices are factored into the equation, New York, Oslo,
Geneva and Tokyo emerge as especially pricey places to
live. The basket costs the least in Kuala Lumpur,
Manila, Delhi and Mumbai. The study was based on data
collected in 73 cities around the world between March
and April of this year.