Shanty town above Luanda, the world's 'most expensive' city



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The lives of expatriates in the
world’s most expensive cities

A review of Mercer's Cost of Living Survey

23 July 2013: For very different reasons, European and African cities are named as the world’s costliest cities for expatriates. While high earnings and strong demand for quality housing drive up prices in Europe, it is the special needs of expatriates that make living in some of Africa’s booming cities extremely expensive. In its 2013 Cost of Living report, US-based consultants Mercer name the Angolan capital Luanda as the costliest city for US expatriates. Moscow and Tokyo are ranked two and three. Switzerland has three cities - Geneva, Zurich and Bern - in the top ten.

In July 2012, similar research by ECA International ranked Tokyo first, followed by Oslo, Geneva, Nahoya and Zurich. A report published by the Swiss Bank UBS in 2012 has Oslo as the world's most expensive city, followed by Zurich, Tokyo and Geneva
. Reseach published by the Economist Intelligence Unit (EIU) in March 2013 found that Tokyo was the most expensive city in the world.

The 10 most expensive cities
according to Mercer, UBS, ECA and EIU
Rank
Mercer (2013)
UBS (2012)
ECA (2012)
EIU (2013)
1
Luanda Oslo Tokyo Tokyo
2
Moscow Zurich Oslo Osaka
3
Tokyo Tokyo Geneva Sydney
4
N’Djamena Geneva Nagoya Oslo
5
Singapore Copenhagen Zurich Melbourne
6
Hong Kong New York City Yokohama Singapore
7
Geneva Luxembourg Bern Zurich
8
Zurich Stockholm Stavanger Paris
9
Bern Caracas Basel Caracas
10
Sydney London Kobe Geneva
The fundamental flaw of all cost-of-living surveys is that they convert local prices into US dollars, which means that any changes are as much the result of currency fluctuations as of price inflation. In surveys by ECA, UBS, Mercer and EIU the cost of living in cities outside the US dollar zone becomes more expensive if the dollar weakens against local currencies even when prices remain unchanged or indeed fall. Probably the most useful figures are those by UBS because the also examine income and purchasing power. The research by ECA, Mercer and EIU is for the benefit of US employees sent abroad by their companies.

Mercer's 2013 Cost of Living survey
The cost of housing is typically the biggest expense for expatriates and it plays an important part in determining the rankings. The Russian capital of Moscow follows Luanda as the second most expensive city because of high costs for rental accommodation and imported goods and services commonly purchased by expatriates commanding a premium. A luxury two bedroom unfurnished apartment rental for one month in Moscow is US$4,600 a month or 14 times as much than Karachi. Rounding out the top five most expensive cities for expatriate living, which also have pricey rental accommodations, are Tokyo, the Chad city Ndjamena and Singapore.

Price comparison of selected items
(All priced in US dollars)
City
Monthly rent, 2-bedroom luxury apartment
Hamburger meal or similar
Cup of coffee
1 liter of petrol
Luanda
6500.00
20.06
3.88
0.63
Moscow
4600.00
6.42
8.29
1.04
Tokyo
4513.34
7.31
6.98
1.74
N'Djamena
n/a
25.51
3.06
0.98
Singapore
3794.94
5.61
4.84
1.76
Hong Kong
7091.74
3.54
5.67
2.23
Geneva
4349.74
12.51
6.52
2.02
Zurich
3914.77
12.51
5.98
2.02
Bern
2686.51
12.51
4.86
2.02
Sydney
2551.42
9.20
5.16
1.51
Source: Mercer’s 2013 Cost of Living Survey

While many Asian cities remained stable in the previous 12 months, a large number have gone down in the 2013 rankings due to weaker local currencies (vs. the US dollar), including the most expensive city in the 2012 rankings – Tokyo, which is ranked third this year. Singapore is ranked 5th globally. High demand for expat accommodation and goods, coupled with a strong currency, make Singapore so expensive. Sydney is also in the top 10 worldwide and the most expensive expatriate destination in the Pacific. Demand for rentals in Sydney keeps growing and supply just isn't keeping up. Other Australian cities are also relatively costly due to the strong Australian dollar. New Zealand is more affordable for expatriates.
 
European and African cities dominate the most expensive expatriate destinations. Luanda, Angola, is the top-ranked city. Another African city near the top was N'Djamena, Chad, ranked 4th. Expatriates living in these cities have high expenditures for appropriate accommodation, transportation and imported goods. Other African cities remain more affordable.
 
Moscow is second in the global rankings, also because of its high-demand rental market and expensive goods commonly purchased by expatriates. Three Swiss cities – Geneva, Zurich, and Bern – are also in the Top 10. Switzerland remains one of the costliest locations for expatriates despite decreasing or stable accommodation costs and a robust Swiss franc. Overall, the cost of living in cities across parts of Europe has gone up mildly as a result of the slight strengthening of local currencies against the US dollar.
 
In the Americas, cities in South America are the most expensive for expatriates. Living in some cities, particularly those in Brazil, became cheaper because of the US dollar's strengthening against local currencies. Other cities became more expensive. The cost of living in some, like Buenos Aires and Caracas, rose due to high inflation. Others, like Mexico City, are facing a strong rental market. Overall, the cost of living in other cities in Latin America and in the Caribbean remained fairly stable, according to Mercer's rankings.  
 
New York, the base city for Mercer's Cost of Living rankings, is the most expensive city in the United States. It became costlier due to rising housing rental costs. Most US cities were stable vs the previous year's ranking, while Canadian cities generally moved slightly down in the rankings this year.


The world's most expensive big cities in 2012
(The Mercer index is based on cost of living expressed in US dollars. Therefore, if the dollar weakens against the local currency of a city, the city becomes more expensive and moves up the index, even if prices expressed in local currency remain the same or go down.)

Rank 2012
Rank 2011
City
Country
1
2
Tokyo Japan
2
1
Luanda Angola
3
6
Osaka Japan
4
4
Moscow Russia
5
5
Geneva Switzerland
6
7
Zurich Switzerland
6
8
Singapore Singapore
8
3
N'Djamena Chad
9
9
Hong Kong Hong Kong
10
11
Nagoya Japan
11
14
Sydney Australia
12
10
São Paulo Brazil
13
12
Rio de Janeiro Brazil
14
16
Bern Switzerland
15
21
Melbourne Australia
16
21
Shanghai China
17
20
Beijing China
18
15
Oslo Norway
19
30
Perth Australia
20
12
Libreville Gabon
21
17
Copenhagen Denmark
22
19
Seoul South Korea
23
34
Canberra Australia
24
31
Brisbane Australia
25
18
London UK
26
44
Khartoum Sudan
27
46
Adelaide Australia
28
29
St. Petersburg Russia
29
51
Caracas Venezuela
30
43
Shenzhen China
31
24
Tel Aviv Israel
31
38
Guangzhou China
33
32
New York City USA
34
23
Niamey Niger
35
70
Yangon Myanmar
36
61
Kinshasa Congo (Dem. Rep.)
37
27
Paris France
38
25
Milan Italy
39
41
Lagos Nigeria
39
63
Bamako Mali
41
67
Abidjan Ivory Coast
42
34
Rome Italy
43
55
Brazzaville Congo
44
39
Djibouti Djibouti
45
33
Brasilia Brazil
46
39
Stockholm Sweden
47
37
Nouméa New Caledonia
48
36
Vienna Austria
49
48
Baku Azerbaijan
50
25
Victoria Seychelles
50
44
Dakar Senegal
52
91
Lomé Togo
53
56
Douala Cameroun
53
63
Bogota Colombia
53
155
Conakry Guinea
56
118
Auckland New Zealand
57
50
Amsterdam Netherlands
58
49
Bangui Central African Rep.
58
52
Taipei Taiwan
60
83
Yaoundé Cameroun
61
59
Toronto Canada
61
69
Jakarta Indonesia
63
65
Vancouver Canada
64
82
Abuja Nigeria
65
42
Helsinki Finland
66
101
Qingdao China
67
75
Beirut Lebanon
68
77
Los Angeles USA
69
47
Prague Czech Republic
70
74
Cotonou Benin
71
62
Brussels Belgium
72
58
Dublin Ireland
72
104
Tianjin China
74
75
Santiago Chile
74
136
Wellington New Zealand
76
67
Abu Dhabi United Arab Emirates
77
53
Athens Greece
78
60
Madrid Spain
79
57
Bratislava Slovakia
79
70
Istanbul Turkey
81
80
Almaty Kazakhstan
81
88
Bangkok Thailand
83
93
Bandar Seri Begawan Brunei
84
72
Luxembourg Luxemburg
85
66
Barcelona Spain
85
122
Shenyang China
87
79
Montreal Canada
88
73
Frankfurt Germany
89
98
Pointe-à-Pitre Guadeloupe
90
78
Munich Germany
90
106
San Francisco CA United States
92
96
Calgary Canada
93
171
Maputo Mozambique
94
81
Dubai United Arab Emirates
94
115
Nanjing China
94
124
Chengdu China
97
88
Riga Latvia
98
99
White Plains NY United States
99
53
Havana Cuba
99
86
Accra Ghana
Research by Mercer Consulting.

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| ECA's most expensive cities | UBS' most expensive cities | EIU's most expensive cities | The iPod-Index |





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