Tokyo Still Most Expensive City for Expats

Tokyo has retained its position as the most expensive city for expatriates in the latest Cost of Living Survey by ECA International. Oslo is the most expensive in Europe, Luanda in Africa, Tel Aviv in the Middle East, Caracas in Central/South America, and Vancouver in North America. Twice a year the survey compares a basket of consumer goods and services commonly purchased by assignees. The Top 10 cities globally were all in Japan, Norway and Switzerland.

Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out a Cost of Living Survey twice a year comparing a basket of consumer goods and services commonly purchased by assignees in over 400 locations worldwide.

Asia Pacific

The Japanese yen has remained strong and Tokyo continues to be the most expensive location in the region for international assignees. For the second year running it is also the most costly globally.

Singapore, which has moved rapidly up the global ranking in recent years and is now at 31^st place. Not only has the Singapore dollar continued to strengthen against major currencies but also the actual price of goods and services in ECA’s cost of living basket has gone up by approximately 5.7% on average over the last year.

The most expensive locations in mainland China are Beijing, in 35^th position globally, and Shanghai, 41^st. Of the Asian locations surveyed, the largest rises up the global rankings have been witnessed among the Chinese provincial capitals. Chengdu rose 21 places to 144 and Wuhan up 20 places to 146. On average, the actual prices of goods and services commonly purchased by international assignees have risen by 9% in China in the last 12 months.

A strong Won means that Korean locations have maintained their positions towards the top of the global ranking. While Seoul has only risen one place to 21 in the last year this is significantly higher than its 56^th position two years ago.

Locations in Pakistan come at the bottom of the regional ranking with Karachi ranked 237^th globally.

The last 12 months have seen considerable increases in cost of food, oil and other commodities in many parts of the world. Within the region some of the biggest increases seen in the local prices of items in ECA’s basket of goods and services have been witnessed in Bangladesh (15%), Vietnam (14.2%) and India (13.3%).

While in some locations, such as Singapore, price inflation has worked together with exchange rate movements to push a location up the cost of living ranking, in other cases currency fluctuations are still outweighing the impact of inflation. For example, despite dramatic price increases seen in Vietnam, the devaluation of the dong earlier in the year has caused locations there to drop down the ranking. So while locals will see their costs going up, the spending power of assignees will have increased due to the effect of exchange rates.

Europe

For the third year running Oslo is the most expensive location in Europe. Globally, the Norwegian capital has risen from 6^th to 2^nd place.

Oslo is followed by Geneva and Zurich in Switzerland. Despite the value of the Swiss Franc falling against major currencies in the aftermath of the Swiss National Bank setting a minimum exchange rate against the Euro, Swiss locations remain in the top 10 most expensive locations globally.

Despite much turmoil in the Eurozone, the Euro has strengthened on average against other major currencies over the last year. As a result, locations in the zone have risen in the ranking, while those in the USA, for example, or in locations where the currency is pegged to the US Dollar, such as Hong Kong, have fallen.

Within Europe, Turkish locations have fallen the furthest in the ranking. The capital Ankara fell 99 places between surveys, a result of a much weakened Turkish Lira against major currencies.

Americas

Caracas (13^th) continues to be the most expensive location for international assignees in the region. The Venezuelan capital is followed by Rio de Janeiro placed 22^nd globally and Sao Paolo in 29^th position.

Vancouver, placed 43^rd globally, is the most costly location in North America. New York’s Manhattan is in 46^th position, down from last year’s 28^th place. Locations across the United States are among those to have fallen the most in the global ranking largely a result of the US Dollar depreciating against many major currencies.

Africa and Middle East

Having fallen from most expensive location globally to 2^nd place last year, Angola’s capital, Luanda, continues to fall down the ranking. It is currently in 11^th position but remains the most expensive location in Africa. Many items typically purchased by assignees in Luanda have to be imported into a country where the infrastructure remains severely damaged after years of war and as a consequence are very expensive. Alexandria in Egypt, ranked 235^th, is the least expensive.

Overall, locations across the Middle East have fallen in the ranking. Israeli locations are by far the most expensive locations for expatriates in the region. Tel Aviv is in 32^nd place globally, down 14 places from a year ago. In contrast Dubai is ranked 180^th while Jeddah, in 232^nd position, is the least costly location surveyed in the region.

Cost of Living Survey

ECA International’s cost of living indices are calculated based upon surveys carried out annually in March and September using a basket of day-to-day goods and services. The data used above refers to year on year movements between ECA’s September 2011 and 2010 surveys.

The data is used by ECA clients to calculate cost of living allowances for assignees. The survey covers:

Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables

Basic: Drink and tobacco; miscellaneous goods; services

General: Clothing; electrical goods; motoring; meals out

Certain living costs such as accommodation, utilities (electricity, gas, water costs), car purchase and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.

This comparison of cost of living was calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons, and different levels of shopping efficiency.

Top 50 most expensive cities worldwide