Cost of Living Rankings, published in
July 2014, show the cost of living for expatriates in 211 cities
worldwide, put Dublin, the Irish capital, at 51st up ten ranks compared
with 2013.
The survey helps multinational companies and
governments determine compensation allowances for employees on international
assignments. It measures the comparative cost of more than 200 goods and
services in each location, including housing, transportation, food, clothing,
household goods, and entertainment.
Currency changes can be a big factor and London (12) jumped 13 positions
from 2013 while Sydney fell 17 places to number 26.
In 2007, Dublin ranked the
16th most expensive city in the world by Mercer, a US firm which focuses on
human resources, health, retirement, and investments.
African, European, and Asian cities most
expensive for expatriates due to currency fluctuations and the impact of
inflation on goods and services.
Rankings
Vienna
remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich
and Geneva overtake Singapore to become world's most expensive cities
Singapore world's most business-friendly location; Followed by Switzerland &
Hong Kong
UBS: Prices and Earnings city report (2012 edition - published every 3 years)
Two African cities top the list of most expensive
cities for expatriates according to Mercer’s 2014 Cost of Living Survey.
Although not typically recognized as wealthy cities compared to others, Luanda
in Angola is the world’s most expensive city for the second year in a row
followed by N’Djamena, Chad. European and Asian cities also continue to dominate
as the costliest cities with Hong Kong in third place, followed by Singapore.
Zurich jumped three places to rank fifth, followed by Geneva in sixth. Tokyo
dropped four spots to rank seventh.
New York is used as the base
city, and all cities are compared against it. Currency movements are measured
against the US dollar.
“Rankings in many regions were affected by recent
world events, including economic and political upheavals, which resulted in
currency fluctuations, cost inflation for goods and services, and volatility in
accommodation prices,” said
Ed Hannibal, partner and global leader for Mercer’s
Mobility practice. While Luanda and N’Djamena are relatively
inexpensive cities, they are quite costly for expatriates since imported goods
come at a premium. In addition, finding secure living accommodations that meet
the standards of expatriates can be challenging and quite costly as well. This
is generally why some African cities rank high in our survey."
Other cities appearing in the top 10 of Mercer’s
costliest cities for expatriates are Bern, Moscow, and Shanghai. Karachi, ranked
211, is the world’s least expensive city for expatriates, and the survey found
that Luanda is more than three times as costly as Karachi.
According to Hannibal, “While multinationals
continue to recognize the importance of having a global workforce and corporate
assignments remain prevalent, they must be able to monitor and balance the cost
of their expatriate programs. Employers need to evaluate the impact of currency
fluctuations, inflation, and political instability when sending employees on
overseas assignments while ensuring they retain talented employees by offering
competitive compensation packages.”
Currency fluctuations and the impact of inflation
on goods and services have influenced the cost of expatriate programs as well as
the city rankings.
Nathalie Constantin-Métral,
principal at Mercer with responsibility for compiling the survey ranking, said,
“Interestingly, several cities jumped up the list this year following large
increases in both accommodation cost and demand, coupled with strong local
currencies. Dhaka and Nairobi (both 117) and Dubai (67) soared thirty seven,
thirty and twenty-three spots, respectively.”
The Americas
Cities in the United States have climbed in the
ranking due to the relative stability of the US dollar against other major
currencies, in addition to the significant drop of cities in other regions which
resulted in US cities being pushed up the list. A rise in the rental
accommodation market pushed New York up 8 places to rank 16, the highest-ranked
city in the region. Los Angeles (62) climbed 10 places from last year while San
Francisco (74) jumped eighteen places. Among other major US cities, Honolulu
(97) is up twenty places, Miami (98), is up sixteen places, and Boston (109) is
up fourteen spots. Cleveland (167) and Winston Salem, North Carolina (182)
remain the least expensive surveyed cities for expatriates.
Hannibal added, “Even though we saw US cities
rise in the rankings this year due in part to the strength of the US dollar,
it’s important to note that relative costs shift with currency volatility,
making overseas assignment costs sometimes greater and sometimes smaller.”
In South America, São Paolo (49) ranked as the
costliest city, followed by Rio de Janeiro (65).
Yet, both cities dropped thirty and thirty-six
positions, respectively, as a result of the Brazilian real weakening against the
US dollar despite increases in rental prices. Buenos Aires also dropped
significantly this year to rank 86, following the devaluation of its currency,
and despite a strong price increase for goods and services. Other cities in
South America that fell on the list of costliest cities for expatriates were
Santiago, Chile, dropping twenty-five places to rank 88 and Bogota, falling
thirty-eight places to rank 98. Managua, Nicaragua (207) is the least expensive
city in South America.
As explained, the exchange rate has a major
impact on a city ranking. This year Mercer left Caracas out of the ranking due
to the multiple, complex exchange rate situation; its ranking would have varied
greatly depending on the official exchange rate selected.
Canadian cities dropped in this year’s ranking
with the country’s highest-ranked city, Vancouver, falling thirty-two places to
rank 96. Toronto (101) dropped thirty-three spots, while Montreal (123) fell
twenty-eight spots. Calgary’s ranking dropped to rank 125. “The Canadian dollar
weakened significantly against the US dollar, which accounts for the major slips
we saw in this year’s ranking,” explained Hannibal.
Europe, the Middle East, and Africa
Four European cities remain in the top 10 list of
most expensive cities. Zurich (5) is the most costly European city on the list,
followed by Geneva (6) and Bern (8). Switzerland remains one of the most
expensive locations for expatriates following the slight strengthening of the
Swiss franc against the US dollar. Moscow (9) and St. Petersburg (35) dropped
seven and twelve spots, respectively, due to a dramatic depreciation of the
ruble against the US dollar.
Overall, Western European cities have all risen
in the rankings mainly due to the strengthening of local currencies against the
US dollar. In particular, cities in the United Kingdom and Germany experienced
some of this year’s biggest surges in the ranking, with Glasgow (108) rising
forty-nine places from 2013, while Aberdeen (94) and Birmingham (90) jumped
thirty-four and forty-five spots, respectively. Munich (55) rose twenty-six
places from last year, Frankfurt (59) jumped twenty-four spots, and Berlin (68)
soared thirty-one places from its previous ranking. Dusseldorf and
Hamburg also rose significantly.
Other cities that jumped in the ranking include
Paris (27), up ten places from last year, Milan (30), up eleven spots, Rome
(31), up thirteen and Vienna (32) up sixteen spots.
Constantin-Métral explained, “Despite moderate
price increases in most of the European cities, European currencies for the most
part slightly strengthened against the US dollar, which pushed most Western
European cities up in the ranking. There have been some increases in
accommodation costs, due to strong demand for rentals, which has also been
behind upward movement in rankings for some European cities – most notably
Copenhagen, Amsterdam, and Frankfurt.”
Most cities in Eastern and Central Europe,
however, fell in the ranking as a result of local currencies depreciating
against the US dollar. Prague (92), Almaty (111), and Minsk (191) fell nineteen,
sixteen, and four spots, respectively, despite there being stable accommodations
in these locations.
Tel Aviv (18) continues to be the most expensive
city in the Middle East for expatriates, followed by Beirut (63), Dubai (67),
and Abu Dhabi (68). Jeddah, Saudi Arabia, (175) continues to rank as the least
expensive city in the region. “Several cities in the Middle East experienced a
jump in the ranking, as they are being pushed up by other locations’ decline, as
well as the strong increase for expatriate rental accommodation costs,
particularly in Abu Dhabi and Dubai,” said Constantin-Métral.
Quite a few African cities continue to rank high
in the 2014 survey, reflecting high living costs and prices of goods for
expatriate employees. Luanda (1) remains the most expensive city for expatriates
across Africa and globally, and Ndjamena follows in second place. Victoria,
Seychelles (13) is the next costliest city in Africa followed by Libreville,
Gabon (19). In South Africa, Cape Town (205) fell eight places in the ranking,
reflecting the weakening the South African rand has suffered against the US
dollar.
Asia Pacific
Four of the top 10 cities in this year’s ranking
are in Asia. The most expensive city, Hong Kong (3), jumped three places from
last year. Singapore (4) is the next most expensive city in the region, gaining
one position from last year, followed by Tokyo, which ranked 7 dropping four
places this year. Jumping four spots since last year, Shanghai (10) is the next
Asian city on the list, followed by Beijing (11), Seoul (14), and Shenzhen (17).
“Japanese cities have dropped in the ranking this
year as a result of the yen’s weakening against the US dollar,” said Constantin-Métral.
“However, Chinese cities jumped in the ranking, including Shanghai, Beijing, and
Shenzhen, due to the strengthening of the Chinese yuan.”
Australian cities have witnessed some of the most
dramatic falls in the ranking this year as the local currency has depreciated
against the US dollar. Sydney (26), Australia’s most expensive ranked city for
expatriates, and Melbourne (33) dropped seventeen places while Perth (37) fell
nineteen spots.
Mumbai (140) is India’s most expensive city,
followed by New Delhi (157) and Chennai (185). Bangalore (196) and Kolkata (205)
are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (88)
dropped twenty-two places from last year. Kuala Lumpur, Malaysia, ranks 115,
followed by Indonesia’s Jakarta which ranked 119, falling forty-eight places
from 2013. Hanoi jumped three spots to rank 131. Karachi, Pakistan (211) remains
the region’s least expensive city for expatriates.
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