Eight of the world’s top 10 most expensive cities are located in Asia as a result of the region’s high costs for consumer goods and a dynamic housing market, with Kuala Lumpur (141) rising four places, according to Mercer’s 25th annual 2019 Cost of Living Survey.
Hong Kong tops the list as the world’s costliest city for the second consecutive year with the local housing market increasingly out of reach for many. Other cities appearing in the top 10 are Tokyo (2), Singapore (3), Seoul (4), Zurich (5), Shanghai (6), Ashgabat (7), Beijing (8), New York City (9), and Shenzhen (10). Ashgabat in Turkmenistan saw the biggest rise in rankings, jumping an astonishing 36 places from 43 rd in 2018, as a result of the country’s shortage of currency and imported goods driving up prices.
While Kuala Lumpur didn’t experience a rise in prices, currency fluctuations saw the Malaysian ringgit lose four per cent to the US dollar. Despite this, Kuala Lumpur rose slightly due to the movement of other cities.
Mario Ferraro, Mercer’s Global Mobility Practice Leader for Asia, Middle East and Africa, said
Asia continued to be a major engine of global economic growth.
“Despite the relatively high cost of living, many organizations still see a strong business rationale for moving talent into and within the region. At the same time, cost considerations are still an issue, and we are seeing an increased focus on having a clear business case for the assignment, as well as measuring the return on investment,” he said.
This year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
Of the world’s major cities, the costs of movie tickets, coffee, property rental and petrol in Hong Kong were the most expensive, with Beijing topping the list for a price of milk at USD 4.45 in comparison to just USD1.21 in New York.
Mercer’s widely recognised survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees.
New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar.
“In a skill-focused economy driven by digital disruption and the need for a globally connected workforce, deploying expatriate employees is an increasingly important aspect of a competitive business strategy for global companies,” said Ilya Bonic, President of Mercer’s Career business.
“There are numerous personal and organizational advantages for sending employees overseas, including career development, global experience, new skillsets, and re-allocation of resources. By offering fair and competitive compensation packages, organisations can facilitate moves that drive business results.”
Eight of the top ten cities in this year’s ranking are in Asia due in part to a strong housing market. Hong Kong (1) remains the most expensive city for expatriates both in Asia and globally as a result of the housing market and currency being pegged to the US dollar, driving up the cost of living locally.
This global financial centre is followed by Tokyo (2), Singapore (3), Seoul (4), Shanghai (6), and Ashgabat, Turkmenistan (7).
Mumbai (67) is India’s most expensive city, followed by New Delhi (118) and Chennai (154). Bengaluru (179) and Kolkata (189) are the least expensive Indian cities ranked.
Elsewhere in Asia, Bangkok (40) jumped twelve places from last year. Hanoi (112) and Jakarta (105) also rose in the ranking, up twenty-five and twelve spots, respectively. Bishkek (206) and Tashkent (208) remain the region’s least expensive cities for expatriates.
Australian cities have continued to fall in the ranking due to the depreciation of the local currency against the US dollar. Sydney (50), Australia’s most expensive ranked city for expatriates, dropped twenty-one places. Melbourne (79) and Perth (87) dropped twenty-one and twenty-six spots, respectively.
Cities in the United States climbed in the ranking due to the strength of the US dollar against other major currencies as well as the significant drop of cities in other regions. New York jumped four places to rank 9, the highest-ranked city in the region. San Francisco (16) and Los Angeles (18) climbed twelve and seventeen places, respectively, while Chicago (37) jumped fourteen places.
Among other major US cities, Washington, DC (42) is up fourteen places, Miami (44) is up sixteen places and Boston (49) is up twenty-one spots. Portland (107) and Winston Salem, North Carolina (138) remain the least expensive US cities surveyed for expatriates.
In South America, Montevideo, Uruguay (70) ranked as the costliest city followed by San Juan (72), which jumped twenty-three spots. Other cities in South America that climbed on the list ofcostlies t cities for expatriates include Panama City (93), San Jose (131), and Havana (133) rising twenty-one, ten, and twenty-two spots, respectively.
Cities that fell in the ranking despite price increases on goods and services and accommodation costs include Brazil and Argentina. In particular, São Paolo (86) dropped twenty-eight spots. Rio de Janeiro (121) dropped twenty-two places, while Buenos Aires (133) fell fifty-seven places. Managua (200) is the least expensive city in South America.
Although most Canadian cities remained stable in the ranking, the country’s highest-ranked city, Vancouver (112), dropped three places. Toronto (115) dropped six spots, while Montreal (139) climbed eight spots. Calgary (153) and Ottawa (161) remained stable.
Europe, the Middle East, and Africa
Only one European city is among the top ten list of most expensive cities, which is Zurich at number five, followed by Bern (12). Geneva (13) is down two places. Eastern and Central European cities, including Moscow (27), St. Petersburg (75), Prague (97), and Warsaw (173), dropped ten, twenty-six, fourteen, and nineteen spots, respectively.
Cities in Western Europe, including Milan (45), Paris (47), Oslo (61), and Madrid (82), fell in the ranking as well, by twelve, thirteen, fourteen, and eighteen spots, respectively.
The German city Stuttgart (126) dropped significantly as did Berlin (81) and Dusseldorf (92).
Cities in the United Kingdom saw modest drops, including Birmingham (135), which fell seven places, Belfast (158) six spots, and London (23) four spots.
“Despite moderate price increases in most of the European cities, European currencies haveweakened against the US dollar, which pushed most cities down in the ranking,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer.
“Additionally, other factors like recent security issues and concern about the economic outlook, have impacted the region.”
Tel Aviv (15) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (33), and Riyadh (35). Cairo (166) remains the least expensive city in the region.
“Many currencies in the Middle East are pegged to the US dollar, which pushed cities
up in the ranking, as well as steep increases for expatriate rental accommodations,” said Traber.
Despite dropping from the top ten most expensive cities for expatriates, N’Djamena (11) remains the highest-ranking city in Africa. Following are Victoria (14) rising seven places, and Kinshasa (22) rising fifteen spots. Libreville (24) dropped six places. Dropping one spot, Tunis (209) in Tunisia ranks as the least expensive city in the region and globally.