Mercer's 2010 Cost of Living Survey names Luanda as the most expensive city in the world
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Currency movements main factor in deciding
ranking of most expensive cities in the world
A review of Mercer's Cost of Living Survey
29 June 2010: Angola's capital city Luanda has replaced Tokyo as the most expensive city in the world for US expatriates according to the latest Cost of Living Survey from Mercer. Tokyo is in second position, while Ndjamena (Chad) is now in third place. The survey's table of the world's 50 most expensive cities includes 10 from Africa.| The top 50 cities | The Mercer survey | Europe | The Middle East | Africa | North America | South America | Asia Pacific | Methodology |
Last year, similar research by ECA International already put Luanda (Angola) first and Tokyo second. A report published by the Swiss Bank UBS in 2009 has Oslo as the world's most expensive city, followed by Zurich and Copenhagen.
The fundamental flaw of all cost 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.
A good example are cities in the United Kingdom. During the past three years the pound sterling has both weakened against the US dollar and the euro - from $2.10 to $1.5 and from €1.50 to €1.23. Therefore London and other British cities have become considerably less expensive for anyone travelling to the UK from Europe or the US, while at the same time the cost of many imported items, including gas and oil, increased due to the diminished purchasing power of the pound. In 2008, according to Mercer, London was the third most expensive city in world, while only two year later it is ranked 17th.
The iPod--Index probably provides a truer indication as to the cost of living across the world. It measure how many hours people in various cities have to work to be able to afford Apple's MP3 player. The average employee in New York City has to work nine hours to afford an iPod nano, whereas in Mumbai he has to work 177 hours.
In Mercer’s 2010 survey, New York is used as the base city for the index and scores 100 points, all cities are compared against New York and currency movements are measured against the US dollar.
The world's most expensive big cities in 2010
(The 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 2010
|
Rank 2009*
|
City
|
Country
|
|
1
|
-
|
Luanda | Angola |
|
2
|
1
|
Tokyo | Japan |
|
3
|
-
|
Ndjamena | Chad |
|
4
|
3
|
Moscow | Russia |
|
5
|
4
|
Geneva | Switzerland |
|
6
|
2
|
Osaka | Japan |
|
7
|
-
|
Libreville | Gabon |
|
=8
|
6
|
Zurich | Switzerland |
|
=8
|
5
|
Hong Kong | Hong Kong |
|
10
|
7
|
Copenhagen | Denmark |
|
=11
|
10
|
Singapore | Singapore |
|
=11
|
14
|
Oslo | Norway |
|
13
|
-
|
Victoria | Seychelles |
|
14
|
-
|
Seoul | South Korea |
|
15
|
11
|
Milan | Italy |
|
16
|
9
|
Beijing | China |
|
=17
|
16
|
London | UK |
|
=17
|
13
|
Paris | France |
|
=19
|
17
|
Tel Aviv | Israel |
|
=19
|
-
|
Nagoya | Japan |
|
21
|
-
|
Sao Paulo | Brazil |
|
22
|
-
|
Bern | Switzerland |
|
23
|
-
|
Niamey | Niger |
|
24
|
-
|
Sydney | Australia |
|
25
|
12
|
Shanghai | China |
|
26
|
18
|
Rome | Italy |
|
27
|
8
|
New York City | USA |
|
28
|
21
|
Vienna | Austria |
|
29
|
-
|
Rio de Janeir | Brazil |
|
30
|
46
|
St Petersburg | Russia |
|
31
|
19
|
Helsinki | Finland |
|
32
|
=34
|
Dakar | Senegal |
|
=33
|
-
|
Bangui | Central African Republi |
|
=33
|
51
|
Melbourne | Australia |
|
35
|
29
|
Amsterdam | Netherlands |
|
36
|
-
|
Baku | Azerbaijan |
|
37
|
30
|
Bratislava | Slovakia |
|
=38
|
=23
|
Guangzhou | China |
|
=38
|
-
|
Noumea | New Caledonia |
|
=40
|
28
|
Athens | Greece |
|
=40
|
27
|
Douala | Cameroon |
|
=42
|
22
|
Shenzhen | China |
|
=42
|
25
|
Dublin | Ireland |
|
44
|
-
|
Istanbul | Turkey |
|
=45
|
34
|
Abidjan | ivory Coast |
|
=45
|
-
|
Havana | Cuba |
|
47
|
-
|
Prague | Czech Republic |
|
48
|
-
|
Brazzavillet | Congo |
|
49
|
=38
|
Barcelona | Spain |
|
=50
|
48
|
Frankfurt | Germany |
|
=50
|
26i
|
Abu Dhabi | UAE |
Similar research by other organisations:
| ECA's most expensive cities | UBS' most expensive cities | EIU's most expensive cities | The iPod-Index |
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Mercer's 2010 Cost of Living Survey
The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees. New York is used as the base city for the index and all cities are compared against New York. Currency movements are measured against the US dollar. The cost of housing – often the biggest expense for expats - plays an important part in determining where cities are ranked.
For the first time, the ranking of the world’s top 10 most expensive cities includes three African urban centres: Luanda (1) in Angola, Ndjamena (3) in Chad and Libreville (7) in Gabon. The top ten also includes three Asian cities; Tokyo (2), Osaka (6) and Hong Kong (jointly ranked 8). Moscow (4), Geneva (5) and Zurich (joint 8) are the most expensive European cities, followed by Copenhagen (10)..
Europe
After Moscow, Geneva, Zurich and Copenhagen, the most expensive cities in Europe are Oslo (11) in Norway, Milan (15) in Italy, London and Paris (both 17) and Bern (22) in Switzerland. Other expensive European cities include Rome (26), Vienna (28), St Petersburg (30) Amsterdam (35), Baku (36) Dublin (42), Istanbul (44), Barcelona (49), Frankfurt (50), Madrid (52) and Lisbon (72). Riga ranks 81 followed by Budapest (94), Warsaw (96) and Tallinn (115). The least expensive city in Europe is Tirana (200) in Albania, followed by Macedonia’s Skopje (197), Sarajevo (196) in Bosnia Herzegovina, Minsk (192) in Belarus and Belfast (182) in the UK.
The Middle East
Tel Aviv (19) is the most expensive city in the Middle East, Abu Dhabi (50) and Dubai (55). Tripoli (186) in Libya is the least expensive Middle Eastern location followed by Jeddah (181) in Saudi Arabia and Muscat (I76) in Oman.
Africa
Reflecting the increasing economic importance of Africa across all business sectors, Mercer’s rankings now includes many African cities for the first time. Many rank highly in the 2010 survey, reflecting the high living costs for expatriate employees. After Luanda, Ndjamena and Libreville, the region’s most expensive cities are Victoria (13) in the Seychelles, Niamey (23) in Niger and Dakar (32) in Senegal. In South Africa, Johannesburg and Cape Town rank 151 and 171, respectively. At the bottom of the ranking, Addis Ababa (208) in Ethiopia is the cheapest African city followed by Windhoek (205) and Gaborone (203) in Namibia and Botswana, respectively.
North America
In the United States, New York (27) is the most expensive city followed by Los Angeles (55). Washington ranks 111. The least expensive City in the United States is Winston Salem (197). Mexico City (166) is the most expensive city in Mexico, while the cheapest is Monterrey (193). Vancouver (75) is the most expensive Canadian city followed by Toronto (76) and Montreal (98). Ottawa (136) is Canada’s least expensive city.
South America
Cities in Brazil are amongst the most expensive locations in the Americas with Sao Paulo (21) ranked as the most expensive city in both North and South America, as a result of the strengthening of the Brazilian Real against the US Dollar. In South America, Brazil’s Rio de Janeiro (29) is the second most expensive city followed by Havana (45) in Cuba, Colombia’s Bogota (66) and Brazil’s capital, Brasilia (70). Buenos Aires ranks 161. Nicaragua’s Managua (212), Bolivia’s La Paz (211) and Asuncion (204) in Paraguay were the least expensive cities in South America.
Asia Pacific
Two Japanese cities, Tokyo and Osaka, are the region’s most expensive cities. Other highly ranked Asian cities are Hong Kong (8), Singapore (11), Seoul (14), Beijing (16), Nagoya (19) in Japan, Shanghai (25) and Taipei (78). A total of seven Chinese cities appeared on the 2010 rankings, highlighting the increased commercial importance to multi-nationals of locations other than just Beijing Shanghai and Hong Kong.
New Delhi (85) is India’s most expensive city followed by Mumbai (89) and Bangalore (190). Elsewhere, Jakarta in Indonesia ranks 94, followed by Vietnam’s Hanoi and Thailand’s Bangkok (both at 121) and Kuala Lumpur (138) in Malaysia. Pakistan’s Islamabad (212) and Karachi (214) are the region’s two least expensive cities.
Sydney (24) is Australia’s most expensive city followed by Melbourne (33) and Brisbane (55) while Adelaide (90) is the country’s least expensive city. Auckland (149) is the most expensive city in New Zealand while Wellington (163) is the cheapest. The Australian Dollar and the New Zealand Dollar have strongly strengthened against the US Dollar, which has moved the cities up in the ranking.
Mercer commented: “At the end of 2009 and the beginning of 2010, residential property prices in many Asian countries rose as the economic environment began to stabilise and demand for good expat housing increased. The strengthening of the Australian and New Zealand Dollar against the US Dollar also made Australian and New Zealand cities more costly for expatriates coming from the US.”
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Methodology
The figures for Mercer’s Cost of Living and rental accommodation costs comparisons are based on a survey conducted in March 2010 with March 2010 exchange rates. March exchange rates correspond to the monthly average exchange rates of February. The 2010 comparisons are based on a similar survey conducted in March 2009. However, the weighting of the basket of goods used in 2009 has been changed for 2010; a few additional items have been added. Additional cities have been added to the 2010 rankings. A direct comparison with the 2009 rankings is therefore not possible.
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| THE MOST EXPENSIVE AND RICHEST CITIES IN THE WORLD UBS survey (August 2009): Most expensiv and richeste cities (Intro) | World's most expensive cities (table) | Richest cities by personal earnings (table) | Richest cities by purchasing power (table | The iPod index | ECA International survey (June 2009): Introduction | Table: World | Table: Europe | Table: Asia | Mercer survey (20010): Most expensive cities EIU survey (2009): Most expensive cities RICHEST CITIES BY GDP Introduction | 150 richest cities in 2005 | 150 richest cities in 2020 | Europe's richest cities | |
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