Mercer’s latest Cost of Living Survey for Worldwide Cities has seen some changes from last year. In a flash overview, Tokyo is now officially the world’s most expensive city to live in for expats. Johannesburg is the cheapest. The top ten are dominated by European and Asian cities, while a major reshuffle took place thanks to currency fluctuations.
UK’s London dropped a massive 13 ranks to position 16 and New York has now joined the top ten. Here are the top ten at a glance:
| Rank 2009 | Rank 2008 | City | Country | Index 2009 | Index 2008 |
1 | 2 | TOKYO | JAPAN | 143.7 | 127 |
2 | 11 | OSAKA | JAPAN | 119.2 | 110 |
3 | 1 | MOSCOW | RUSSIA | 115.4 | 142.4 |
4 | 8 | GENEVA | SWITZERLAND | 109.2 | 115.8 |
5 | 6 | HONG KONG | HONG KONG | 108.7 | 117.6 |
6 | 9 | ZURICH | SWITZERLAND | 105.2 | 112.7 |
7 | 7 | COPENHAGEN | DENMARK | 105.0 | 117.2 |
8 | 22 | NEW YORK CITY | US | 100.0 | 100.0 |
9 | 20 | BEIJING | CHINA | 99.6 | 101.9 |
10 | 13 | SINGAPORE | SINGAPORE | 98.0 | 109.1 |
Covering 143 cities worldwide, Mercer’s survey measures the comparative cost of some 200 items within each city. Considered the most comprehensive list to measure the cost of living in the world it helps governments and large corporations determine compensation allowances for their expatriate staff.
Nathalie Constantin-Métral, a senior researcher at Mercer, said: “As a direct impact of the economic downturn over the last year we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s ranking. Many currencies, including the Euro and British pound, have weakened considerably against a strong US dollar causing a number of European cities to plummet in the rankings.”
“With significant exposure to multiple economies and currencies, multinational companies continue to be greatly affected by the financial crisis. The cost of expatriate programmes is heavily influenced by currency fluctuations and inflation rates. Now that cost containment and reduction is at the top of most company agendas, keeping track of the change in factors that dictate expatriate cost of living and housing allowances is essential.”
“It is important for multinational companies to continuously benchmark against their peers to ensure compensation packages are fair and in line with the rest of the market.”
Europe, Middle East and Africa
Within Europe, Moscow is still the most expensive city for expat workers. Despite this, a drastic depreciation of the rouble against the US dollar has led to a noteworthy fall in the city’s index score.
Several European cities have experienced some of the biggest drops from last year. This is mainly due to the economic recession and the drop in currencies.
Ms Constantin-Métral said: “As most European currencies have weakened against the dollar it has become more costly for companies based in this region to send expatriates and their families to US cities.”
“The decline of rental prices both in Oslo and London, coupled with the fall in the value of British pound and Norwegian krone against the US dollar, have caused these cities to plummet in the ranking.”
On the contrary, many Middle Eastern cities have seen a sharp reverse trend with Dubai and Abu Dhabi seeing significant rise in rankings. This has been attributed to the fix of the UAE dirham to the US dollar. Tel Aviv is still considered the most expensive city in the Middle East.
In Africa, most cities have moved up in rankings. Interestingly, many of their index scores have actually decreased. With the strength of the Egyptian pound, Cairo has risen some 44 places up to 57th position while the rand dropped Johannesburg to the bottom of the lot.
The Americas
The strengthening US dollar has helped all US cities to experience a rise in rankings. In the region New York is still the best ranked city while both Los Angeles and Washington jumped remarkably.
Canadian cities on the other hand have slipped a few ranks. Toronto is the highest ranked Canadian city.
Caracas in Venezuela is the top ranking city in South America. Rio de Janeiro and Sao Paolo have experienced a reverse move.
Asia
Tokyo has claimed the international spotlight as the most expensive city in the world. With the strengthening of the Japanese yen Osaka has slipped into second place.
When the Indian rupee lost value against the US dollar last year, many cities dropped in the rankings as a result. Both New Delhi andMumbai dropped several notches.
Chinese cities experienced the opposite as the Chinese renminbi performed relatively strongly compared to many other currencies. Beijing is now in ninth place, Shanghai, Shenzhen and Guangzhou follow in 12th, 22nd and 23rd place respectively.
Australia and New Zealand
With the dramatic loss of the Australian and New Zealand dollar, many cities have dropped rankings. Sydney remains the most expensive city for expatriates in the region but dropped from 15th to 66th place. Melbourne follows in 92nd, down from 36th. Auckland has moved down to 138th place from 78th and Wellington follows in 139th down from 93rd.
