Low inflation drops Tokyo out of world’s top 10 most expensive cities and into tie with Osaka for 11th

Thomson Reuters Foundation, AFP-JIJI

Singapore remains the world’s most expensive city for the fifth consecutive year, with Paris, Zurich and Hong Kong following closely behind, according to the Worldwide Cost of Living Survey published on Thursday.

Low inflation meant Tokyo — the most expensive city until 2013 — dropped to 11th, tied with Osaka, in the Economist Intelligence Unit’s biannual study of 133 cities.

No other Japanese cities were ranked.

Another pricey perennial, New York, did not make the top 10, beaten out by Paris and Zurich (joint second), Hong Kong (fourth) and Oslo (fifth). Seoul and Geneva shared sixth place, while Copenhagen, Tel Aviv and Sydney rounded out the rankings.

Singapore has avoided the massive traffic jams common in other big Asian cities by controlling vehicle ownership through a quota system under which a buyer must pay for a certificate of entitlement — nearly 40,000 Singapore dollars ($30,500) — on top of the vehicle’s actual price.

Asian cities tend to be most expensive for grocery shopping, while Europe comes out tops in household, personal care, recreation and entertainment, the survey said.

The Irish capital of Dublin overtook London, which is now ranked 30th, due to the euro’s strength and a weaker pound, said the report’s author, Roxana Slavcheva.

“A strong euro has driven up the relative cost of living in not just Dublin, but all eurozone cities included in the survey,” she said.

“This has resulted in a move up the rankings for Dublin of six spots (to 19) since last year’s ranking, even as consumer price inflation in Ireland remains low.”

The report noted that Britain’s cities are at their cheapest level internationally in more than two decades, in part due to economic uncertainty following the 2016 Brexit vote.

Currency appreciation means Tel Aviv rose from 34th place five years ago to ninth today.

Researchers compared the cost of more than 400 items such as cars, food, rent and clothing. A loaf of bread cost $15.59 in Seoul versus $3.87 in Copenhagen, for instance, while a bottle of table wine in Tel Aviv was $28.77 but just $8.37 in Geneva.

Notably, no U.S. cities featured in the top 10, with New York and Los Angeles ranking 13th and 14th. That was largely due to a weaker dollar.

The Uzbek capital, Tashkent, became much cheaper after its currency nearly halved in a single day after being allowed to float freely last year. Cairo became cheaper too after floating its currency in late 2016.

New Delhi, Bucharest and Algiers were in the 10 cheapest cities. Places experiencing political turmoil, such as Damascus and Caracas, also featured at the bottom of the survey, along with Lagos in Nigeria and the Pakistani city of Karachi.