Currency playing a major role in living costs for expats deployed abroad

by Ray Clancy on December 11, 2015

Zurich in Switzerland is the world’s most expensive location for expats due to the relative strength of the Swiss Franc, with currency playing a major part in costs for those working abroad.

Indeed, the findings from the latest Cost of Living survey by ECA International, a provider of knowledge, information and technology for the management and assignment of employees around the world, show that Swiss cities have moved to the top of the rankings.

switzerlandCities that were ranked higher last year, Luanda, Oslo and Stavanger, have all become cheaper in comparison as their currencies have weakened significantly. And Switzerland now dominates with Geneva, Bern and Basel in second, third and fourth places.

The latest survey also shows that central London has moved into the top 10 most expensive cities in Europe to ninth position, up four spots from last year. It’s a significant rise from three years ago when it was outside of the top 80 locations ranked. Although, like many currencies, sterling has weakened against the US dollar between annual surveys, it has strengthened against a number of other major currencies in the year.

Indeed, cities throughout the UK have climbed the rankings with Edinburgh moving to 13th in Europe, up from 30th last year. Cardiff has also moved into Europe’s top 20 most expensive locations rising to 15th place, up 23 places from 38th position in 2014.

The weakening of the Norwegian Krone in response to the weakened oil sector contributed to Oslo’s tumble down the ranking from being the most expensive of the European locations surveyed last year. It has since fallen to 5th position behind the Swiss cities of Zurich, Geneva, Bern and Basel.

The euro’s depreciation between surveys has seen all Eurozone locations drop down the global rankings with French, Belgian and German locations among those falling hardest. Paris has fallen from 47th place to 68th while Munich falls out of the global top 100 to 110th place, down 43 places from last year. Elsewhere, Brussels has also fallen 29 places this year to 86th place.

Although prices in Russia have soared since international sanctions were imposed, cities there plummeted down the list of the most expensive locations for expatriates. The rouble, also affected by the fall in oil prices, weakened significantly over the twelve months between surveys outweighing price increases. Moscow, in 15th position a year ago, is now 162nd in the latest global rankings. Moscow has experienced the most significant fall in the rankings.

Shanghai, which was ranked third in the Asia Pacific region a year ago, has moved up to 1st place as the most expensive city for expatriates in the Asia Pacific region and 14 Chinese cities now rank in the global top 50 most expensive locations for expats. Within China, Shanghai is just ahead of Beijing at 8th globally, Guangzhou 14th and Shenzhen 16th.

Hong Kong is now the third most expensive city for expatriates in the Asia Pacific region. From a global perspective, it has moved into the top ten to 9th position, up from 26th place last year. During the past 12 months the dollar appreciated against most currencies contributing to Hong Kong’s rise in the rankings.

Luanda has fallen from last year’s global top spot to 5th place this year, but it has remained Africa’s most expensive location surveyed in 2015. The cost of goods typically purchased by international assignees in this location are likely to be high due to import and transportation costs.

Australian locations continue to fall significantly down the rankings, a reflection of the weakened Australian dollar as growth there slows. Sydney remains the most expensive city in Australia; it currently ranks 80th globally, down from last year’s 27th place.

Manhattan is the most expensive location in North America. The strengthening of the US dollar between surveys has seen locations across the United States climb the rankings. Manhattan has risen to 15th place globally, up from last year’s 38th spot.

Buenos Aires is the most expensive location in Latin America. The Argentine capital ranks 21st globally, in sharp contrast to last year when it was 121st. Although the peso marginally weakened against some major currencies between annual surveys, it has remained artificially high in the run up to the presidential elections earlier this year.

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