Luanda in Angola is the world’s most expensive city for expatriates for the second year running, according to Mercer’s 2011 Cost of Living Survey. Tokyo remains in second position and N’Djamena in Chad in third place. Moscow follows in fourth position with Geneva in fifth and Osaka in sixth. Zurich jumps one position to rank seventh, while Hong Kong drops down to ninth.
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.
At rank 32, New York 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. Ms Constantin-Métral said: “Generally speaking rental prices increased slightly in most US cities as the economy is recovering and demand for housing is catching up.”
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.
During the past year, the US Dollar has devalued against most Asian currencies. In particular, the Singapore Dollar and Australian Dollar appreciated considerably, not only against the US Dollar, but against other currencies such as the Euro and British Pound. The impact for expatriates working in these countries will depend on whether they are on limited term assignments retaining ties to their home country and whether they are provided provisions for currency protection by their employers, or whether they are on indefinite or permanent transfers and thus on more localized packages without currency protection. The impact to organizations, particularly those where financial reporting is in US Dollars, is an increase in the costs associated with international assignments to these countries.
Australian cities have witnessed the ranking’s most dramatic jumps as the local currency has gained almost 14% against the US dollar. Although the costs of goods and services and housing in Sydney (14) has remained stable, it is up ten places, Melbourne has moved from rank 33 to 21 and Perth has surged 30 places to reach rank 30.
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 in the world due to the strengthening of the Singapore Dollar and the substantial increase in housing costs. It is followed by Hong Kong (9) whose ranking dropped by one position due to the devaluation of the Hong Kong Dollar which is pegged to the US Dollar, even though there was considerable increase in housing costs. 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.
For further information, or to purchase copies of the individual city reports, visit www.mercer.com/costofliving