Singapore and Paris knock Tokyo off top of list of most expensive cities

by Ray Clancy on March 11, 2014

Singapore has been named as the world’s most expensive city, knocking Tokyo off the top spot, according to the Economist Intelligence Unit’s Worldwide Cost of Living Survey.

The report compares the cost of living between 131 cities worldwide comparing a basket of goods ranging from household items, alcohol and clothing to petrol and utilities.

singapore flag

Singapore has become the world’s most expensive city over Tokyo and Paris

Expats wondering what their living costs could be will find out from the report that Paris is now the second most expensive city. It is popular with expats from the UK, the United States and Australia.

But baguettes, a glass of beer and bills now cost more after the city moved up six places on the annual list. The report suggests that this is due to recovering European prices and currencies. Other European cities such as Oslo, Zurich, Geneva and Copenhagen are also in the top 20 most expensive cities.

London is ranked 15th most expensive, but expats in the UK looking for a big city with lower living costs could consider Manchester which is ranked 49 and offers better value for money with living costs about 20% cheaper than the capital city.

Mumbai in India offers the best value for money and is joined among the cheapest locations by South Asian cities such as New Delhi, Karachi in Pakistan and Kathmandu in Nepal. Economic instability relating to the civil war and the collapse of the Syrian Pound has placed Damascus among the world’s cheapest cities.

Currencies are important when working out living costs for expats as many are paid in different currency to the country where they live and work. The report points out that the sliding Yen has made Japanese cities cheaper as far as the cost of living is concerned.

Price rises and a stronger currency mean that Singapore has become the world’s most expensive city and Singapore’s rise comes at the expense of Tokyo, traditionally the world’s most expensive city, which is now in sixth place.

While some may point to a 40% appreciation in the value of the Singapore dollar over the last decade as the driver behind Singapore’s current position, the city state is also subject to some structural factors, such as car related costs, which have contributed to rising prices, the report explains. Meanwhile, currency appreciation has cemented Sydney in fifth place and Melbourne in joint 6th.

‘Improving sentiment in structurally expensive European cities combined with the continued rise of Asian hubs means that these two regions continue to supply most of the world’s most expensive cities,’ said Jon Copestake, editor of the report, which looks at over 400 individual prices.

‘But Asian cities also continue to make up many of the world’s cheapest, especially in the Indian subcontinent,’ he added.

But other emerging cities are seeing the cost of living rise. For example, Caracas adds a Latin American flavour to the 10 most expensive, but the report points out that its position is largely due to the imposition of an artificially high official exchange rate. If alternative black market rates were applied Caracas would comfortably become the world’s cheapest city in which to live.

Beyond Caracas the most expensive city in the Americas is New York in 26th place, with the US city becoming more expensive than Vancouver, Canada over the last year.

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