ParisAP

Tokyo is the world's most expensive city for expatriates - while Karachi, the port city and financial centre of Pakistan, is the cheapest, according to Mercer's latest Cost of Living Survey. Karachi is less than a third as expensive as the Japanese capital.

Somewhat surprisingly, the Angolan capital Luanda is the second-most expensive city in the world for expats to live in. But where are the cheapest places?

Most UK cities have become cheaper for expats despite high inflation over the past year, mainly because the dollar has strengthened against the pound.

UK
In the UK, London (25) is still the most expensive city for expatriates, but has slipped seven places from last year. At 133, Birmingham has climbed 17 places, having overtaken Aberdeen (144) and Glasgow (161), which have both fallen several places. Belfast (165) is the UK's least expensive city, but up 13 places in the ranking since 2011.

"Despite price increases on goods and services most UK cities moved down in the ranking this year, following the loss in value of the British pound against the US dollar. However, Birmingham and Belfast bucked the trend, moving up in the ranking mainly because rental costs for expatriates increased a fair bit and price increases in these cities were higher than in say London and Glasgow," said Milan Taylor, head of Mercer's data and product services in the UK and Ireland.

The survey of the cost of living in 214 cities was compiled by human resources firm Mercer, which compared the prices of 200 everyday items covering food, clothing, transport, housing and entertainment around the world, along with the strength of local currencies against the dollar. Housing is often the biggest expense for expats and therefore an important factor in the ranking. New York is used as the base city.



A cost of living comparison in sterling shows that a typical cinema ticket for an international movie costs £12 in London, but only £8.37 in Paris, £6.28 in Rome, £6.7 in Madrid and £7.97 in Luanda. However, due to the high cost of imported goods in Africa and Asia, a pair of blue jeans is £112.03 in Luanda - against just £80 in London and £71.09 in Berlin. A luxury apartment costs £2,800 to rent a month in London, compared with £4,114.24 in Luanda, £1,924.72 in Paris, £1,506.3 in Rome and Amsterdam, £1,004.20 in Berlin - and just £753.15 in crisis-struck Athens.

Nathalie Constantin-Métral, principal at Mercer who is responsible for compiling the ranking each year, said: "When compared to New York, our benchmark city, most European cities have witnessed a decline in cost of living. Some exceptions exist where accommodation prices have increased or additional VAT taxes have pushed the cost of living up.

"In North America, most cities have gone up in the ranking, as the US dollar has strengthened against a large proportion of the world's other currencies. In Asia, more than six in ten cities moved up in the rankings, including all surveyed cities in Australia, China, Japan and New Zealand. Cities in Australia and New Zealand witnessed some of the biggest jumps, as their currencies strengthened significantly against the US dollar."

Down under
Australia and New Zealand, usually popular with British expats, have become more expensive - partly because the Aussie and New Zealand dollar have risen in value but also because of higher housing costs.

Sydney (11) and Melbourne (15) experienced relatively moderate increases, up three and six places respectively, whereas Perth (19) and Canberra (23) both jumped 11 places. Brisbane (24) rose by seven places, and Adelaide (27) shot up 19 places. Australia now has three cities in the top 20. In New Zealand, both Auckland (56) and Wellington (74) both jumped a whopping 62 places.

"The leap up the list by cities in New Zealand follows large increases in both accommodation cost and demand, coupled with a stronger New Zealand dollar," explained Constantin-Métral. "Demand for rental properties has also increased significantly in all the Australian cities we rank. Coupled with very limited availability, the result has been very tight markets and increased prices."

Europe
In fourth place globally, Moscow remains the most expensive city in Europe for expatriates, followed by Geneva and Zurich. With a few exceptions, the remaining European cities have all dropped in the rankings, mainly due to the weaker euro and other local currencies.

Especially for Brits, who have seen the pound rise against the euro in recent months, continental Europe has become a lot cheaper. Paris (37) is down 10 places, whereas Milan (38), Rome (42), Stockholm (46), Vienna (48) and Amsterdam (57) are all down between seven and 13 places. Helsinki (65) and Prague (69) have both slid down even more, by 23 and 22 places respectively. Brussels (71) dropped a more moderate nine places, followed by Dublin (72) – down 14 places. Ranking 207, Skopje, Macedonia, is the least expensive city for expatriats in Europe.

Middle East and Africa
Tel Aviv (31) continues to be the most expensive city in the Middle East for expatriates, despite dropping seven places since 2011.

Along with Luanda in Angola, Chad's capital Ndjamena, Gabon's Libreville and Khartoum, the Sudanese capital, are fairly high up the list. Constantin-Métral said: "It might be surprising to see 20 African cities in the top third of the ranking. The main driver behind this is the difficulty finding good, secure accommodation for expatriates. So the limited supply of acceptable accommodation is very expensive. The cost of imported international goods is also high, contributing to many regional cities moving up the ranking."

Rankings

March 2012

March 2011

City

Country

1

2

TOKYO

JAPAN

2

1

LUANDA

ANGOLA

3

6

OSAKA

JAPAN

4

4

MOSCOW

RUSSIA

5

5

GENEVA

SWITZERLAND

6

7

ZURICH

SWITZERLAND

6

8

SINGAPORE

SINGAPORE

8

3

N'DJAMENA

CHAD

9

9

HONG KONG

HONG KONG

10

11

NAGOYA

JAPAN



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