Cost Of Living Guides


Majority of world’s most expensive cities for expats in Europe and Asia

by Ray Clancy on July 14, 2014

African, European, and Asian cities are the most expensive for expats due to currency fluctuations and the impact of inflation on goods and services, a new survey has found.

Two African cities top the list of most expensive cities, according to Mercer’s 2014 Cost of Living Survey. Although not typically recognized as wealthy cities compared to others, Luanda in Angola is the world’s most expensive city for the second year in a row, followed by N’Djamena, Chad.

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The most expensive cities for expats are surprisingly in Angola and Chad

European and Asian cities also continue to dominate as the costliest cities with Hong Kong in third place, followed by Singapore. Zurich jumped three places to rank fifth, followed by Geneva in sixth, while Tokyo dropped four spots to rank seventh.

The survey measures over 211 cities and is one of the world’s most comprehensive. It 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.

“Rankings in many regions were affected by recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices,” said Ed Hannibal of Mercers.

“While Luanda and N’Djamena are relatively inexpensive cities, they are quite costly for expats since imported goods come at a premium. In addition, finding secure living accommodations that meet the standards of expats can be challenging and quite costly as well. This is generally why some African cities rank high in our survey,” he explained.

Other cities appearing in the top 10 of Mercer’s costliest cities are Bern, Moscow, and Shanghai. Karachi, ranked 211, is the world’s least expensive city.

The firm pointed out that several cities jumped up the list this year following large increases in both accommodation cost and demand, coupled with strong local currencies. Dhaka and Nairobi, both tied for 117th spot, jumped 37 and 30 spots up the list, respectively. Dubai also moved up 23 places to become the 67th most expensive city for expats.

The survey says that cities in the US have climbed in the ranking due to the relative stability of the US dollar against other major currencies, in addition to the significant drop of cities in other regions which resulted in US cities being pushed up the list. A rise in the rental accommodation market pushed New York up eight places to 16, the highest ranked city in the region. Los Angeles is ranked 62, up 10, San Francisco up 18 places to 74, and Honolulu at 97, Miami, 98 and Boston, 109.

In South America, São Paolo, at 49, is the costliest city in the region followed by Rio de Janeiro at 65, falling 30 and 36 places respectively as a result of the Brazilian réal weakening against the US dollar despite increases in rental prices. Buenos Aires also dropped significantly this year to rank 86, following the devaluation of its currency, and despite a strong price increase for goods and services.

Canadian cities dropped in this year’s ranking with the country’s highest ranked city, Vancouver, falling 32 places to 96. Toronto fell 33 to rank 101 and Montreal, at 123, fell 28 places.

Overall, Western European cities have all risen in the rankings mainly due to the strengthening of local currencies against the US dollar. In particular, cities in the UK and Germany experienced some of this year’s biggest surges in the rankings, with Glasgow, at 108, up 39 places, Aberdeen, at 94, up 34 places and Birmingham, at 90, up 45 places. Munich, at 55, is up 26 places, with Frankfurt up 24 places to 59 and Berlin, at 68, has risen by 31 places. Dusseldorf and Hamburg also rose significantly.

Other cities that jumped in the ranking include Paris which jumped 10 places to 27, Milan, up 11 places to 30, Rome, up 13 to rank at 31 and Vienna, up 16 to number 32.

Most cities in Eastern and Central Europe, however, fell in the ranking as a result of local currencies depreciating against the US dollar. Prague at 92, Almaty at 111, and Minsk, at 191, fell 19, 16 and four places respectively.

For more information and to see the full list of 2014’s most expensive expat cities you can check out the Mercer website.

 

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