Tokyo once-again is the world’s most expensive city to live in for expats, according to a new survey by HR consultants Mercer.
In the Japanese capital a cup of coffee costs US$6.60, a newspaper US$5, and a liter of milk US$2.50.
Karachi, Pakistan ranked least expensive, its cost of living less than one-third that of Tokyo.
Recent world events, including economic and political upheavals, have affected the rankings for many regions through currency fluctuations, inflation, and volatility in accommodation prices.
The annual survey, which covers 214 countries across five continents, measures the comparative cost of over 200 items in each location, including transportation, clothing, food, household goods and entertainment. Cities are ranked according to the needs of expats.
Notable cities in Europe include Oslo (18), down three places from 2011, London (25), down seven places, Paris (37), down ten places, Prague (69), down twenty-two places, and Dublin (72), down fourteen places. Skopje, Macedonia (207), is the least expensive city for expats in Europe.
Most European cities dropped in the rankings this year, mainly due to the considerable weakening of local currencies, including the euro, against the U.S. dollar.
“Countries badly hit by the Eurozone crisis, including Greece, Italy, and Spain, have also experienced drops in rental accommodation prices,” noted Nathalie Constantin-Metral, Principal at Mercer, who compiled the rankings.
Notable cities in the Americas include Sao Paulo (12) and Rio de Janeiro (13), the most expensive in the hemisphere. Also included is New York City (33), most expensive in the U.S., Caracas (29), up twenty-two places from 2011, Los Angeles (68), up nine places, Miami (110), up five places, and Chicago (110), down two places.
Dropping from its 53rd position in 2011, Havana (99) experience the largest drop in the region as the U.S. dollar strengthened considerably against the Cuban peso. Buenos Aires (121), up thirty-eight places, made the region’s largest jump due to strong inflation, increasing local household goods and accommodation costs.
Ms. Constantin-Metral commented, “Inflation pressures continue to push some South American cities up in the ranking, whereas for some of the region’s cities, weakening of the local currencies caused them to rank lower.”
Notable Canadian cities include Toronto (61), the highest in that country, Vancouver (63), Montreal (87), down eight places, and Calgary (92), up four places.
In the Asia Pacific region, Tokyo (1) emerged at the most expensive city both in Asia and worldwide. Other notables include Osaka (3), Singapore (6), Hong Kong (9), Shanghai (16), Seoul (22), Jakarta (61), up eight places, Bangkok (81) up seven places, and Kuala Lumpur (102), up two places.
“The combination of increased prices on good and a strengthening of the Chinese yuan has pushed Chinese cities up the ranking,” said Ms. Constantin-Metral, citing higher rental costs as well.
In India, New Delhi (113) and Mumbai (114) dropped considerably, by twenty-eight and nineteen places respectively.
Australian cities include Sydney (11), Melboure (15), Perth (19), Brisbane (24) and Adelaide (27).
“Demand for rental properties has increased significantly in all the Australian cities we rank. Coupled with limited availability, the result has been very tight markets and increased prices,” said Mr. Constantin-Metral.
Last year’s most expensive city, Luanda, Angola, dropped to second-place.
The least expensive city is Karaicha, Pakistan, with a cost of living one-third of Tokyo.
The survey was conducted to help multinational companies determine compensation allowances for their expat employees.
Said Ms. Constantin-Metral, “Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategy, including expansion. But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages. Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them.”