Cities index reveals costliest places for living and working

by Ray Clancy on April 1, 2016

When companies post expats overseas they often take a variety of costs into account and now new research suggests it is more costly to set them up in London than anywhere else in the world.

Multinationals have costs associated with setting up an office but also many expats have accommodation packages too and both such costs are rising in London.

Looking at the combined cost of residential and office space per person every year, the cost of accommodating an employee in London is more than four times that of accommodating the same worker in Berlin, just over three times the cost in Dublin, and almost 30% more than Paris.

new york city

London tops the cities costs list compiled by international real estate firm Savills which says that living and working costs per person per year in the capital of the UK costs $112,800, followed closely by New York at $111,300, then Hong Kong at $103,200 and Paris some way behind at $78,200.

Costs in Paris have actually fallen down 4% year on year and in Hong Kong costa are down 3% compared to five years ago. Costs are up 2% year on year in London, and 18% compared with five years ago while in New York they are up 5% year on year and 39% over five years.

Among the less costly cities are Rio de Janiero at $16,500 per year, Johannesburg at $20,700, Berlin at $27,700, Mumbai at $28,400 and Dublin at $36,500.

Some cities have seen costs rise considerably, for example, over the last five years they are up 49% in San Francisco and up 71% in Dubai. While in Los Angeles costs have increased by 9% in the last year.

The report points out that while they are still relatively cheap compared with their European peers and many other global cities, both Dublin and Berlin, appearing in 16th and 18th position respectively, have seen significant increases in costs since 2010 as their potential has been recognised.

It explains that these cities, with their history, culture and distinctive styles, have succeeded in attracting people, typically from younger generations, unable to afford to live in some of the cities which feature at the top of our table.

They have also fostered a spirit of independent thinking and creatively which, combined with other factors such as favourable tax regimes, has made them attractive to tech occupiers.

Indeed, such companies have accounted for over a third of office take up in both cities in the past year, and could be responsible for them rising up the league table in the future as space becomes scarcer and residential costs and office rents rise accordingly.

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