According to a new report from human resources firm Mercer Consulting, the cost of living in North American, Asian and African cities has been rising this past year, despite the global slowdown.
The study looked at 214 cities worldwide and used New York City as the benchmark. Mercer’s annual cost of living survey is used by multinational companies to determine compensation for their expatriate employees around the world. The rankings are based on the cost of more than 200 items in each location including housing, transportation, food, clothing and entertainment.
So, which cities are the most expensive to live in?
1. Tokyo, Japan
Photo: Hiroshi HiguchiTokyo is the most expensive place to live in the world for expatriates and is one of three Japanese cities to make the top 10 list this year.
The city has risen from the number two spot last year and has been ranked either first or second for the past five years. While the cost of renting in Asia’s most expensive city has remained relatively the same, the cost of other goods like a cup of coffee, fuel and a fast-food meal has gone up over the past year. By comparison, Tokyo is about one-third more expensive than Karachi, which is the least expensive city for expats among the 214 cities surveyed by Mercer.
As Japan’s most important economic center, Tokyo is the most desirable place for expats to live in. But the city's real estate market is expected to be hit by shrinking demand from expatriates in 2012 due to corporate cost-cutting and downsizing, according to Knight Frank.
Monthly Rent, Luxury 2 Bedroom: $4,848
Cup of Coffee: $8.29
One Gallon of Gasoline: $7.34
Daily International Newspaper: $6.38
Fast-Food Meal: $8.29
2. Luanda, Angola
Photo: Chad HenningLuanda, the capital of Africa’s second largest oil producer, has fallen to second place this year from the number one spot it has held since 2010. An oil boom has helped Angola become the third-largest economy in sub-Saharan Africa after South Africa and Nigeria. Crude oil sales account for over 95 percent of its export revenue, and the government expects GDP growth of 12.8 percent in 2012.
The most costly expense in Luanda is renting property, similar to number 8th ranked N’Djamena. Despite the average monthly cost of renting a luxury two-bedroom apartment falling $500 compared to last year, it still remains high at $6,500. Consumer inflation in Angola was more than 11 percent year-on-year in March.
The country is the largest recipient of foreign direct investment in sub-Saharan Africa with inflows of nearly $10 billion in 2010, according to the United Nations Conference on Trade and Development (UNCTAD). Its main overseas investors include China, Portugal, Brazil and the U.S. and expatriates from these countries are sent to oversee local operations in Luanda.
Monthly Rent, Luxury 2 Bedroom: $6,500
Cup of Coffee: $3.90
One Gallon of Gasoline: $2.38
Daily International Newspaper: $5.46
Fast-Food Meal: $19.94*
*Replaced by club sandwich and soda in absence of any comparable fast food outlets.
3. Osaka, Japan
Photo: Allan BaxterOsaka, Japan’s second largest city, has moved up three spots this year from sixth in 2011 and 2010.
Known as an important commercial center for Japan, about 1.1 million people commute into the city during the day, according to the Japanese Statistics Bureau. The city has high rental prices because of its dense population, a limited amount of accommodation and high expatriate demand. A relatively strong yen has also heightened the cost of living for expatriates. The cost of buying daily goods like a cup of coffee, fuel, an international newspaper and fast food have all gone up from last year.
Osaka is also a key industrial hub and home to nearly 44,000 manufacturers, which creates added pressure on resources. But a strong yen and an aging labor pool have hit the once mighty industrial hub in recent decades. The city has seen a decline in manufacturing with three firms closing shop every day since the peak year of 1983.
Monthly Rent, Luxury 2 Bedroom: $3,062
Cup of Coffee: $7.02
One Gallon of Gasoline: $6.85
Daily International Newspaper: $6.38
Fast-Food Meal: $8.29
4. Moscow, Russia
Photo: Lars RueckerMoscow is the most expensive city in Europe for expatriates and has ranked fourth globally since 2010.
Despite widespread concerns over corruption, red tape, pollution and growing traffic congestion, Moscow’s place as Russia’s main political and business capital makes it the top destination for expat workers. The city attracts more investment than other Russian cities and accounts for about a quarter of the country’s $1.5 trillion economy. Daily issues like power outages and safety also drive up the cost of living for foreigners.
The rising cost of renting property is the most substantial increase in living costs for 2012, according to Mercer, with a luxury two-bedroom apartment going up by $200 compared to last year. Demand for luxury property in Moscow is also high because of growing wealth from the country’s oil and commodities boom. Moscow is home to the most billionaires in the world at 79, according to Forbes.
Monthly Rent, Luxury 2 Bedroom: $4,200
Cup of Coffee: $8.37
One Gallon of Gasoline: $3.67
Daily International Newspaper: $9.78
Fast-Food Meal: $6.70
5. Geneva, Switzerland
Photo: Katarina StefanovicGeneva has been ranked as the fifth most expensive place to live in the world for the past three years by Mercer. It is Switzerland’s second-largest city after Zurich. Together, the two cities represent the high cost of living in Switzerland, the only Western European country to make the top 10 list.
Geneva is the country’s most expensive metropolitan area and like Zurich, the Swiss franc’s appreciation has raised the cost of living for expatriates. The average monthly rent for a luxury two-bedroom apartment in the city has gone up by nearly $300 from last year to around $4,800.
Geneva is home to 20 international organizations such as the United Nations, World Trade Organization and Red Cross, making it a big draw for expats. Over 44 percent of the city’s population is made up of foreigners. The cosmopolitan hub is also home to the world’s most expensive private schools and is said to have one of the best education systems, further adding to the high cost of living for families.
Monthly Rent, Luxury 2 Bedroom: $4,818
Cup of Coffee: $6.57
One Gallon of Gasoline: $7.46
Daily International Newspaper: $4.38
Fast-Food Meal: $12.59
6. Zurich, Switzerland (Tied)
Photo: José Fuste RagaZurich, home to a number of banking giants such as UBS and Credit Suisse, moved one spot higher this year from 7th in 2011 and 9th in 2010.
Zurich is an attractive location for international firms looking to take advantage of Switzerland’s low tax rates. Expatriates are also drawn to Zurich’s high quality of life. The city ranks third in the world when it comes to education, tax, and security as motives for purchasers to buy luxury property, according to Knight Frank.
While most European cities have dropped in the rankings, the strength of the local currency, the Swiss franc, has boosted the cost of living in Zurich. While Mercer ranks Zurich as the sixth most expensive city, the Economist Intelligence Unit (EIU) ranks it as number one. EIU’s survey covers 130 cities and takes into account 160 products and services.
Monthly Rent, Luxury 2 Bedroom: $3,614
Cup of Coffee: $6.02
One of Gallon Gasoline: $7.38
Daily International Newspaper: $4.38
Fast-Food Meal: $12.59
6. Singapore (Tied)
Photo: Wsboon ImagesSingapore, like other Asian financial centers, has seen a big inflow of expatriates, which has pushed up the cost of housing and other living costs.
The city has been moving up Mercer’s most expensive cities list, rising two spots this year from eighth in 2011 and 11 th in 2010. Known for its high property prices and rents compared to the rest of Southeast Asia, Singapore is also an extremely expensive place to own a car. The permit to buy a new car can cost anywhere between $46,000 to over $67,000. Prices of these 10-year permits, known as Certificate of Entitlement (COE), have jumped 40 percent since the beginning of this year.
An average Toyota Vios subcompact costs $85,700 including the permit, up from about $60,000 at the beginning of the year, according to motoring website SGcarmart.com.
Given the steep cost of living in Singapore, expat salaries are also correspondingly high. According to a survey by HSBC more than half of expats in Singapore earned more than $200,000 in 2011, making it the country with the highest expat salaries in Asia. Expats in Singapore need to have larger incomes than their home countries to maintain their standard of living. About 82 percent of expats surveyed said they were more likely to spend more money on accommodation, while 65 percent said they would spend more on food in 2011 compared to the global average of around 50 percent.
Monthly Rent, Luxury 2 Bedroom: $3,588
Cup of Coffee: $5.18
One Gallon of Gasoline: $6.55
Daily International Newspaper: $3.59
Fast-Food Meal: $5.66
8. N’ Djamena, Chad
Photo: Kanbou Sia/AFPN’Djamena, the capital and economic center of the central African country of Chad, fell five spots this year from third place in 2011 and 2010.
The key reason behind the high cost of living in N’Djamena is the difficulty in finding suitable and safe accommodations for expatriates, making the few available places extremely expensive. Companies must also take into account the personal safety of employees in the violence-mired city, further adding to costs.
The influx of expatriates working in Chad’s oil industry has pushed up the cost of living, with a fast-food meal costing as much as $25. Chad’s oil fields have attracted a number of international energy giants such as China National Petroleum Corporation (CNPC), Exxon Mobil, Chevron and Malaysia’s state-run Petronas. Chad saw investments of more than $8 billion in 2011 by Chinese firms keen to cash in on the country’s energy industry.
Monthly Rent, Luxury 2 Bedroom: N/A
Cup of Coffee: $3.32
One Gallon of Gasoline: $6.55
Daily International Newspaper: $6.85
Fast-Food Meal: $25.18
9. Hong Kong
Photo: Joe Chen PhotographyHong Kong, the only Chinese city or territory to make the top 10 list, has been ranked the ninth most expensive place to live for the past two years, falling from the eighth spot in 2010.
One of the most substantial increases in the cost of living in Hong Kong has been in renting property. The average monthly rent for a luxury two-bedroom apartment jumped around $1,300 from $5,800 in 2011 to almost $7,100 this year. As one of the most densely populated cities in the world with limited housing supply, average house prices have skyrocketed over 93 percent between 2006 and 2011 — making Hong Kong the world’s second-hottest property market, according to real estate consultancy Knight Frank.
Hong Kong’s reputation as a major global financial center remains a big draw for international businesses and expatriates, which in turn pushes up the cost of living. The cost of food and fuel has also gone up from last year with headline inflation jumping nearly 5 percent in April.
Monthly Rent, Luxury 2 Bedroom: $7,092
Cup of Coffee: $6.83
One Gallon of Gasoline: $8.36
Daily International Newspaper: $3.61
Fast-Food Meal: $3.54
10. Nagoya, Japan
Photo: Jantelagen/Mark McDonaldThe cost of living in Nagoya has risen rapidly in the past few years, with the city breaking into the top 10 for the first time in 2012 from 11th in 2011 and 19th in 2010.
Nagoya is Japan’s auto manufacturing hub, and an important place of business for some of the world’s leading carmakers like Toyota, Honda, General Motors and Volkswagen.
Expats are generally drawn to the city because of its large industrial sector. Demand for housing in the densely populated area, which is the third-largest in Japan, has driven up the cost of housing.
Still, the cost of renting a luxury two-bedroom apartment in Nagoya is around half the cost of renting in Tokyo. But Nagoya is as expensive as Tokyo when it comes to the cost of a cup of coffee, fuel or a fast-food meal. To top it off, a surging yen has resulted in higher prices in general for expats living in Japan.
Monthly Rent, Luxury 2 Bedroom: $2,551
Cup of Coffee: $6.38
One Gallon of Gasoline: $6.70
Daily International Newspaper: $6.38
Fast-Food Meal: $8.42
World’s Most Expensive Places to Live originally appeared on CNBC.com
http://finance.yahoo.com/news/the-world-s-most-expensive-places-to-live-2012.html?page=all
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