Tokyo has officially become the world’s most expensive city for expatriates, overtaking the Angolan capital of Luanda, while Osaka has moved up to third place, according to a global survey by consulting firm Mercer LLC.
After Osaka, Singapore at 6 and Hong Kong at 9 were judged the costliest cities in Asia, while Chinese metropolises, including Shanghai, Beijing, Shenzhen and Guangzhou, rose on higher prices for goods and the stronger yuan, according to Mercer’s 2012 Cost of Living Survey.
“Recent world events, including economic and political upheavals, have affected the rankings for many regions through currency fluctuations, inflation and volatility in accommodation prices,” Mercer said Tuesday while unveiling the findings.
The analysis, which covered 214 cities, used New York as a base and measured comparative prices of more than 200 items in each location, including housing costs, transport, clothing, food, household goods and entertainment. Housing costs are considered critical as they are often expatriates’ biggest expense.
In Tokyo, the monthly rent on a luxury two-bedroom unfurnished apartment comes to $4,766 (about ¥379,500), while a cup of coffee including service averages $8.15 (¥650), the survey showed.
Karachi is the least expensive city for foreign residents, less than a third as costly as Tokyo, followed by Islamabad, Managua, Kyrgyzstan’s Bishkek, La Paz, Tunis and Kolkata, according to the findings.
In the Asia-Pacific region, both Wellington and Auckland in New Zealand jumped a “very significant” 62 places following “large increases in accommodation cost and demand, coupled with a stronger New Zealand dollar,” said Nathalie Constantin-Metral, who helped compile the data.
“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.”
Most European cities dropped in the rankings, mainly due to what Mercer termed a “considerable weakening” of local currencies against the dollar. The euro has shed 3.9 percent against the U.S. currency over the past six months, the worst performance among 10 currencies of developed nations tracked by Bloomberg.
Moscow remains Europe’s most expensive place to live, with expatriates having to pay about $9.60 (¥765) for an international newspaper, while Geneva retained its ranking as the world’s fifth-most expensive city and Zurich moved up one place to sixth. The Swiss capital, Bern, gained two spots to 14 due to the franc’s strengthening against the dollar, the consulting firm said.
Elsewhere on the continent, Oslo fell to 18 from 15 in the list and London to 25 from 18, while Paris slipped 10 places to 37. Milan, Rome, Stockholm, Vienna, Amsterdam, Brussels and Dublin dropped between seven to 14 places each, Constantin-Metral said.
“Despite some marked price increases across the region in the first half of last year and widespread increases in VAT charges, most European cities dropped in the ranking,” she said. “This is mainly due to the unstable economic situation across Europe, which has led to the depreciation of most local currencies against the dollar.”
The majority of British cities also slipped in the rankings as the pound fell against the dollar, said Milan Taylor, head of Mercer’s data and product services in the U.K. and Ireland.
“Birmingham and Belfast bucked the trend, moving up in the rankings mainly because rental costs for expatriates increased a fair bit and price increases in these cities were higher than in, say, London and Glasgow (Scotland’s largest city)” Constantin-Metral said.
Tel Aviv remains the costliest city for expatriates in the Middle East, even though it dropped seven places to 31, while Jeddah in Saudi Arabia is still the cheapest in the region, at 186. Among African metropolises, Johannesburg plummeted 23 places to 154 and Cape Town fell 21 to rank 179, “reflecting the considerable weakening the South African rand has suffered against the dollar in the last year,” Mercer said.