Mercer's 2011 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 2011 Cost of Living Survey
12 July 2011: There are no changes at the top of Mercer’s 2011 ranking of most expensive cities in the world. Luanda in Angola is the world’s most expensive city for the second year running. Tokyo remains in second position and N'Djamena in Chad in third place. Moscow follows in fourth position with Geneva in fifth. However, further down the table there are major changes mostly down to currency fluctuations. For example, the strengthening of the Brazilian currency against the US dollar meant that Sao Paulo moved up from 21st to 10th place, while Rio de Janeiro jumped from 29th to 12th place.| The top 50 cities | The Mercer survey | Europe | The Middle East | Africa | North America | South America | Asia Pacific | Methodology |
Two years ago, 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 Europe. During the past year the Euro has weakened against the US dollar. Therefore cities like Paris, Milan, Frankfurt and Amsterdam have become considerably less expensive for anyone travelling to Europe from the US. In 2011 there are no German cities in the top 50 of most expensive cities.
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 2011 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 2011
(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 2011
|
Rank 2010
|
City
|
Country
|
|
1
|
1
|
Luanda | Angola |
|
2
|
2
|
Tokyo | Japan |
|
3
|
3
|
Ndjamena | Chad |
|
4
|
4
|
Moscow | Russia |
|
5
|
5
|
Geneva | Switzerland |
|
6
|
6
|
Osaka | Japan |
|
7
|
8
|
Zurich | Switzerland |
|
8
|
11
|
Singapore | Singapore |
|
9
|
9
|
Hong Kong | Hong Kong |
|
10
|
21
|
Sao Paulo | Brazil |
|
11
|
19
|
Nagoya | Japan |
|
=12
|
7
|
Libreville | Gabon |
|
=12
|
29
|
Rio de Janeiro | Brazil |
|
14
|
24
|
Sydney | Ausralia |
|
15
|
11
|
Oslo | Noway |
|
16
|
22
|
Bern | Switzerland |
|
17
|
17
|
Copenhagen | Denmark |
|
18
|
17
|
London | UK |
|
19
|
14
|
Seoul | South Korea |
|
20
|
16
|
Beijing | China |
|
=21
|
25
|
Shanghai | China |
|
=21
|
33
|
Melbourme | Australia |
|
23
|
23
|
Niamey | Niger |
|
24
|
19
|
Tel Aviv | Israel |
|
=25
|
13
|
Victoria | Seychelles |
|
=25
|
15
|
Milan | Italy |
|
27
|
17
|
Paris | France |
|
28
|
67
|
Ougadougopu | Burkina Faso |
|
29
|
30
|
St Petersburg | Russia |
|
30
|
60
|
Perth | Australia |
|
31
|
55
|
Brisbane | Australia |
|
32
|
27
|
New York City | USA |
|
33
|
70
|
Brasilia | Brazil |
|
=34
|
26
|
Rome | Italy |
|
=34
|
74
|
Canberra | Australia |
|
36
|
28
|
Vienna | Austria |
|
37
|
38
|
Noumea | New Caledonia |
|
38
|
38
|
Guangzhou | China |
|
=39
|
62
|
Djibouti | Djibouti |
|
=39
|
76
|
Stockholm | Sweden |
|
41
|
62
|
Lagos | Nigeria |
|
42
|
31
|
Helsinki | Finland |
|
43
|
42
|
Shenzen | China |
|
=44
|
32
|
Dakar | Senegal |
|
=44
|
141
|
Kartoum | Sudan |
|
46
|
90
|
Adelaide | Australia |
|
47
|
47
|
Prague | Czech Republic |
|
48
|
36
|
Baku | Azerbaijan |
|
49
|
33
|
Bangui | Central African Republic |
|
50
|
35
|
Amsterdam | Netherlands |
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 2011 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 designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city 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 expatriates – plays an important part in determining where cities are ranked.
New entries in the top 10 list of the costliest cities in the world are Singapore (8), up from 11, and São Paulo (10), which has jumped 11 places since the 2010 ranking. Karachi (214) is ranked as the world’s least expensive city, and the survey found that Luanda, in top place, is more than three times as costly as Karachi. Recent world events, including natural disasters and political upheavals, have impacted the rankings for many regions through currency fluctuations, cost inflation for goods and services and volatility in accommodation prices.
Europe
Only three European cities remain in the top 10 list of most expensive cities. Moscow (4) is still the most costly European city on the list, followed by Geneva (5) and Zurich (7). Oslo (15) is down four places from last year, whereas Bern (16) has jumped six and Copenhagen dropped seven places from 10 to 17. London (18) is followed by Milan (25) and Paris (27) both down 10 places from last year. St. Petersburg ranks 29, followed by Rome (34) and Vienna (36). Up from 76 in 2010, Stockholm (39) has seen one of the most dramatic changes in the region – mainly due to a considerable strengthening of the local currency against the US dollar.
The Middle East
Ranking 24, Tel Aviv is down five places from 2010 but continues to be the most expensive city in the Middle East. Abu Dhabi (67), Dubai (81) and Amman (103) follow having dropped 17, 26 and 20 places in the ranking respectively. The trend of falling accommodation costs continues across the Middle East region, driving the cities down the ranking along with the cost of living for expats. Dubai in particular is witnessing a drastic reduction in accommodation costs as the supply of property keeps flooding the rental market.
Africa
Luanda (1) remains the most expensive city for expatriates across Africa and globally, and N'Djamena follows in third place. Libreville (12) has slipped five places since last year. Niamey remains at 23 whereas Victoria (25) in the Seychelles dropped 12 places as the Seychelles rupee has weakened against the US dollar. In South Africa, Johannesburg (131) and Cape Town (158) have leapt 20 and 13 places in the ranking respectively, reflecting the strengthening of the South African rand. The least expensive cities in the region are Tunis (207) and Addis Ababa (211)..
North America
At rank 32, New York City is the most expensive city in the United States. Los Angeles (77) and Chicago (108) have dropped significantly in the rankings (22 and 17 places respectively) as price increases on goods and services have been moderate compared to New York. Washington, however, also at ranking 108, has climbed three places, as rental accommodation prices have increased significantly.
Portland (186) and Winston-Salem (197) are the least expensive cities in the United States. Up 17 places, Toronto (59) has overtaken Vancouver (65) to become the most expensive Canadian city in the ranking, followed by Montreal (79) and Calgary (96). Ranking 114, Ottawa is the least expensive city in Canada.
South America
Up 11 and 17 places in the ranking respectively, São Paulo (10) and Rio de Janeiro (12) are now the most expensive locations in both North and South America. In South America, Brasilia (33) is the third most expensive city, up 37 places since last year’s ranking. High inflation on goods and services means Caracas in Venezuela has also shot up in the rankings, to rank 51 from 100 in 2010. Bolivia’s La Paz (212) and Nicaragua’s Managua (213) were the least expensive cities in South America.
Inflation pressures continue to be the main impact on the cost of goods and services in Argentina and Venezuela, causing their cities to jump in the ranking. Overall, exchange rates in South America remain relatively stable, with the exception of local currencies in Brazil, Chile and Costa Rica which have all strengthened significantly against the US dollar, causing the region's cities to rise in the ranking.
Asia Pacific
Australian cities have witnessed some of the most dramatic jumps in the ranking as the local currency has gained almost 14 per cent against the US dollar. Sydney (14) is up ten places, Melbourne has moved from rank 33 to 21 and Perth has surged 30 places to reach rank 30. Up 44 places, Adelaide (46) is the country’s highest riser.
The most expensive city in Asia is Tokyo (2), followed by Osaka (6). Singapore (8) has joined the list of the world’s top 10 most expensive cities and is followed by Hong Kong (9). Nagoya (11) in Japan is up eight places whereas Seoul (19) is down five. Other highly ranked Asian cities are Beijing (20), Shanghai (21), Guangzhou (38), Shenzhen (43) and Taipei (52).
New Delhi (85) is India’s most expensive city followed by Mumbai (95) and Bangalore (180). Elsewhere in Asia, Jakarta ranks 69, Hanoi 136, Bangkok 88 and Kuala Lumpur 104. Karachi (214) is the region’s least expensive city.
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Methodology
The figures for Mercer’s Cost of Living and rental accommodation costs comparisons are derived from a survey conducted in March 2011. March 2011 exchange rates and Mercer’s international basket of goods and services have been used as basis measurements.
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Introduction
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