São Paulo and Rio de Janeiro are the most expensive cities in Latin America moving up from 119th and 124th positions as world’s costliest cities to 34th and 40th place respectively, according to the latest Cost of Living Survey from Mercer Human Resource Consulting .
This significant alteration is due to the strong appreciation of the Brazilian real against the US dollar (more than 20 %), which has occurred as a result of solid economic growth and increased foreign investment over the last two years, together with reduced public debt and high interest rates.
In particular, the cost of international-standard accommodation has risen significantly in these cities.
In contrast Asuncion in Paraguay remains the least expensive city globally, in 144th position with a score of 43.5. Other cheap cities include Buenos Aires, Montevideo and Caracas in 142nd place (score 54.8.), 138th (56.5) and 136th (57.2) respectively.
According to the Mercer survey, Moscow has replaced Tokyo as the world’s most expensive city. Seoul is in second place, climbing three places since last year. Tokyo moves down two positions in the rankings to take third place, followed by Hong Kong.
With New York as the base city scoring 100 points, Moscow scores 123.9 and is nearly three times costlier than Asuncion, which has an index of 43.5.
Mercer’s survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.
"We have seen significant shifts in the cost of living rankings over the past few years, reflecting a changing global market. For many companies it can now be more expensive to send employees to work in Russia or Korea than places like Japan or Switzerland which are often perceived to be more costly," commented Rebecca Powers, a Senior Consultant with Mercer’s international business.
She added: "More companies are now sending employees on expatriate assignments, so there is a greater need to keep pace with the cost of living changes. Employers need to be proactive in managing their expatriate programs to ensure they receive a proper return on their investment and employees are compensated fairly."
There have been some significant changes in the rankings this year which are primarily due to exchange rate fluctuations, in particular the strengthening of the US dollar.
Asia
Four of the world’s ten costliest cities are in Asia, with Seoul moving up from 5th to second place. While Tokyo has lost its title of the world most expensive city because of currency fluctuations between the Japanese yen and the US dollar, it still ranks highly and takes third place. Hong Kong is in 4th position.
"Chinese cities have moved up slightly in the rankings as the value of the Yuan renminbi is now pegged to a number of currencies rather than just the US dollar," said Anna Krotova, Senior Researcher at Mercer. Beijing is in position 14 (score 94.9) followed by Shanghai in 20th place (91.2).
"Singapore moved from 34 to 17th position as prices on rents of international standard accommodation have significantly increased during the period from March 2005 to March 2006. In addition, the Singapore dollar has very slightly appreciated against the US dollar," said Neo Siew Khim, Mercer Principal and Human Capital Product Solutions Business Leader, Asia Pacific.
Mumbai moved from 105th place to 68th place (score from 70.8 to 79.9) while New Delhi moved up from 110th place to 73rd place (score from 69.9 to 79). New Delhi and Mumbai’s ranking increased significantly due to increasing costs on international standard accommodation. Rents have increased dramatically in Mumbai due to the increase in capital value and an acute shortage of expatriate accommodation.
Australasia
Auckland and Wellington have dropped in the rankings this year to positions 100 and 105 respectively (scores 72.9 and 71.1) due to the significant devaluation of the New Zealand dollar against the US dollar. Sydney is still the most expensive city in the region at 19th place with a score of 91.3. Melbourne occupies 74th place (78.8) while Brisbane is in 99th position (73.2).
The Americas
New York remains the most expensive city in North America and climbs three places to 10th position (score 100). Currency appreciation is the main reason for this, although price increases in fuel and certain consumer goods have also contributed to New York’s rise in the rankings.
Other high-ranking cities include Los Angeles in position 29 (86.7), San Francisco in 34th place (85) and Chicago in 38th position (84.1). Washington DC takes 83rd place (77). Winston Salem is the cheapest US city surveyed, ranked 124th (66.7).
"The strengthening of the US dollar against the European and other major currencies is a large contributor to the rise of most US cities in the rankings," commented Ms Powers.
Though still relatively inexpensive and benefiting from stable inflation, Canadian cities continue to move up the rankings due to the strength of the Canadian dollar. Toronto is the most expensive city in Canada and moves up from 82nd to 47th place (82.6). Ottawa remains the least expensive Canadian city but has climbed 32 places from 122nd to 90th (75.6).
Puerto Rico has experienced high inflation during the last year which, together with the strength of the country’s currency (US dollar), means San Juan is the costliest city in Central America and the Caribbean in 55th position (score 81.4).
San Jose is the least expensive in 134th place (58.1). Santo Domingo in the Dominican Republic is in 126th position (65.3) and has dropped 27 places due to the depreciation of the Dominican Peso against the US dollar.
Europe
Moscow is the most expensive city in Europe and in the rest of the world, with a score of 123.9. "Steep accommodation costs have contributed to the city’s high ranking, as the recent property boom has driven up rental prices for expatriates," said Ms. Krotova.
London is the second most expensive city in Europe and ranks in 5th position (score 110.6). "While prices have actually increased slightly over the last year, the strengthening of the dollar against the pound means London has dropped two places since last year," said Ms. Krotova.
Other costly European cities include Geneva in 7th place (103), Copenhagen in 8th (101.1) and Zurich in 9th (100.8) — all have been pushed down one place this year. Oslo remains in 10th place with a score of 100 while St. Petersburg is in 12th position (99.7).
Ms Krotova commented: "The Euro has weakened against a number of currencies, for example the Canadian and US dollars, reducing the cost of living for expatriates in many European countries."
Kiev in Ukraine has moved up from 54th position to reach 21st place (score 89.8). This is mainly due to the appreciation of the local currency, the hryvna, against the US dollar, together with general price increases. Many other Eastern European cities have dropped sharply in the ranking due to the devaluation of local currencies against the US dollar. For example, Prague has fallen 22 places to rank 50th with a score of 82.1.
Leipzig is Europe’s cheapest city in 123rd position with a score of 68.1. Individual reports are produced for each city surveyed.
The figures for Mercer’s cost of living comparisons are based on a survey conducted in March 2006. The 2006 comparisons are based on a similar survey conducted in March 2005. The information is used by governments and major companies to protect the purchasing power of their employees when transferred abroad. The choice of cities surveyed is based on the demand for corresponding data from companies and governmental organizations.
Mercer Human Resource Consulting is a global leader for HR and related financial advice and services, with more than 15,000 employees serving clients in more than 190 cities and 40 countries and territories worldwide.
Exchange rates used in cost comparisons:
1 GBP = 1.75 USD
1 GBP = 1.46 EUR
Cost of Living Survey — Worldwide Rankings 2006
Rankings COL Index
March 06 March 05 City Country March 06 March 05
1 4 MOSCOW Russia 123.9 119
2 5 SEOUL South Korea 121.7 115.4
3 1 TOKYO Japan 119.1 134.7
4 9 HONG KONG Hong Kong 116.3 109.5
5 3 LONDON United Kingdom 110.6 120.3
6 2 OSAKA Japan 108.3 121.8
7 6 GENEVA Switzerland 103 113.5
8 8 COPENHAGEN Denmark 101.1 110
9 7 ZURICH Switzerland 100.8 112.1
10 10 OSLO Norway 100 105.3
10 13 NEW YORK CITY United States 100 100
12 15 ST. PETERSBURG Russia 99.7 99.5
13 11 MILAN Italy 96.9 104.9
14 19 BEIJING China 94.9 95.6
15 22 ISTANBUL Turkey 93.1 93.8
15 12 PARIS France 93.1 102.2
17 34 SINGAPORE Singapore 92 88
18 13 DUBLIN Ireland 91.8 100
19 20 SYDNEY Australia 91.3 95.2
20 30 SHANGHAI China 91.2 90.4
21 17 ROME Italy 89.8 97.3
21 54 KIEV Ukraine 89.8 84.5
21 16 VIENNA Austria 89.8 97.8
24 39 TEL AVIV Israel 89.7 87.6
25 20 HELSINKI Finland 87.8 95.2
25 73 DUBAI United Arab Emirates 87.8 77.8
27 22 DOUALA Cameroon 87.6 93.8
28 29 TAIPEI Taiwan 86.8 90.6
29 44 LOS ANGELES United States 86.7 86.7
30 64 ABU DHABI United Arab Emirates 86 81
31 96 LAGOS Nigeria 85.5 72.8
32 52 BEIRUT Lebanon 85.4 84.6
32 50 HANOI Vietnam 85.4 84.9
34 119 SÃO PAULO Brazil 85 66.6
34 50 SAN FRANCISCO United States 85 84.9
36 18 STOCKHOLM Sweden 84.8 96.8
37 56 HO CHI MINH CITY Vietnam 84.2 83.8
38 52 CHICAGO United States 84.1 84.6
39 57 MIAMI United States 83.9 83.3
40 124 RIO DE JANEIRO Brazil 83.5 65.4
41 123 LUSAKA Zambia 83.4 65.6
41 24 AMSTERDAM Netherlands 83.4 93.3
43 45 WHITE PLAINS United States 83.2 86.6
44 63 SHENZHEN China 82.9 81.3
45 26 ABIDJAN Cote d’Ivoire 82.8 93
45 36 DAKAR Senegal 82.8 87.9
47 82 TORONTO Canada 82.6 76.2
48 71 JAKARTA Indonesia 82.4 78.9
48 31 BRATISLAVA Slovak Republic 82.4 89.9
50 28 PRAGUE Czech Republic 82.1 90.8
51 58 ALGIERS Algeria 82 81.9
52 75 ALMATY Kazakhstan 81.9 77.6
53 46 MADRID Spain 81.6 86
54 65 GUANGZHOU China 81.5 80.6
55 74 SAN JUAN Puerto Rico 81.4 77.7
56 87 VANCOUVER Canada 81.2 74.3
56 43 BARCELONA Spain 81.2 86.9
56 33 LUXEMBOURG Luxembourg 81.2 88.2
59 41 ATHENS Greece 81.1 87.2
60 40 GLASGOW United Kingdom 80.7 87.5
61 34 FRANKFURT Germany 80.5 88
62 67 AMMAN Jordan 80.4 80.1
62 32 DUSSELDORF Germany 80.4 88.4
62 27 WARSAW Poland 80.4 91.5
65 37 MUNICH Germany 80.2 87.8
65 24 BUDAPEST Hungary 80.2 93.3
67 61 HONOLULU United States 80 81.4
68 105 MUMBAI India 79.9 70.8
69 47 BIRMINGHAM United Kingdom 79.7 85.8
70 41 BRUSSELS Belgium 79.5 87.2
71 98 CALGARY Canada 79.3 72.5
72 38 BERLIN Germany 79.2 87.7
73 110 NEW DELHI India 79 69.9
74 68 MELBOURNE Australia 78.8 80
75 91 ACCRA Ghana 78.6 73.6
76 70 HOUSTON United States 78.5 79.1
77 49 HAMBURG Germany 78.2 85
78 72 KUWAIT CITY Kuwait 78 78.3
79 48 ZAGREB Croatia 77.7 85.2
80 107 MONTREAL Canada 77.6 70.7
81 54 RIGA Latvia 77.2 84.5
81 95 MEXICO CITY Mexico 77.2 73.1
83 78 WASHINGTON United States 77 77.4
84 80 MORRISTOWN United States 76.8 76.9
84 79 BOSTON United States 76.8 77
86 83 ATLANTA United States 76.3 76.1
87 86 MANAMA Bahrain 76.1 74.5
88 59 CASABLANCA Morocco 75.9 81.6
88 66 LISBON Portugal 75.9 80.2
90 122 OTTAWA Canada 75.6 66.4
91 128 SANTIAGO Chile 74.5 64.8
91 61 LYON France 74.5 81.4
93 108 GUATEMALA CITY Guatemala 74.3 70.4
93 97 CAIRO Egypt 74.3 72.5
93 93 PERTH Australia 74.3 73.5
96 60 TALLINN Estonia 73.7 81.5
97 94 DENVER United States 73.6 73.2
98 88 RIYADH Saudi Arabia 73.5 74.1
99 84 BRISBANE Australia 73.2 74.9
100 89 JEDDAH Saudi Arabia 72.9 73.9
100 69 AUCKLAND New Zealand 72.9 79.6
102 103 SEATTLE United States 71.9 71.4
103 115 MONTERREY Mexico 71.6 67.7
103 102 ST. LOUIS United States 71.6 71.6
105 76 WELLINGTON New Zealand 71.1 77.5
106 76 LJUBLJANA Slovenia 71 77.5
107 119 NAIROBI Kenya 70.9 66.6
108 89 ADELAIDE Australia 70.6 73.9
109 105 KINGSTON Jamaica 70 70.8
110 109 CLEVELAND United States 69.8 70.3
111 112 PORTLAND United States 69.7 68.8
111 81 SOFIA Bulgaria 69.7 76.3
113 111 PITTSBURGH United States 69.4 69.2
114 117 KUALA LUMPUR Malaysia 69.3 67.1
114 103 BUCHAREST Romania 69.3 71.4
116 91 VILNIUS Lithuania 69.2 73.6
117 116 JOHANNESBURG South Africa 69.1 67.4
118 100 LIMASSOL Cyprus 68.7 71.9
118 118 LIMA Peru 68.7 66.9
118 113 BANDAR SERI Brunei 68.7 68.5
BEGAWAN
121 114 PANAMA CITY Panama 68.5 68.3
122 101 DETROIT United States 68.3 71.8
123 85 LEIPZIG Germany 68.1 74.8
124 119 WINSTON SALEM United States 66.7 66.6
125 129 TEHRAN Iran 66.4 64.4
126 99 SANTO DOMINGO Dominican Republic 65.3 72.3
127 125 BANGKOK Thailand 64.9 65.3
128 131 TIANJIN China 63.6 62.5
129 130 BLANTYRE Malawi 63.1 62.7
130 133 BOGOTA Colombia 62.7 62.7
131 127 DACCA (DHAKA) Bangladesh 62.5 62.5
132 132 COLOMBO Sri Lanka 61.4 60
133 126 TUNIS Tunisia 60.7 65.2
134 135 SAN JOSE Costa Rica 58.1 58
135 137 QUITO Ecuador 57.4 54.6
136 138 CARACAS Venezuela 57.2 54.4
137 138 CHENNAI (MADRAS) India 56.7 54.4
138 140 MONTEVIDEO Uruguay 56.5 53.5
139 141 BANGALORE India 56.4 51.7
140 136 KARACHI Pakistan 56.1 56.1
141 143 MANILA Philippines 56 49.8
142 142 BUENOS AIRES Argentina 54.8 50.3
143 134 HARARE Zimbabwe 50.9 58.4
144 144 ASUNCION Paraguay 43.5 40.3
Cost of living comparisons in US$s — 2006
Selected cities worldwide
(NB purchases at medium-priced establishments)
London Dublin Paris Rome Amsterdam
Rent of a luxury two bedroom
unfurnished apartment (per
month) 2975.00 1440.36 2280.57 1620.41 1620.41
Bus or subway ride 3.50 1.80 1.68 1.21 1.93
Music CD 20.98 24.61 20.39 25.52 26.39
1 issue of international daily
newspaper 1.93 2.40 2.40 2.40 3.12
1 cup of coffee, including
service 3.33 3.61 2.64 2.64 2.99
Fast food hamburger meal 7.88 7.09 7.21 6.84 7.81
Source: Mercer Human Resource Consulting
Cost of living comparisons in US$s — 2006
Selected cities worldwide
(NB purchases at medium-priced establishments)
Berlin Athens Brussels Madrid Prague
Rent of a luxury two bedroom
unfurnished apartment (per
month) 1260.32 1260.32 1140.28 1560.39 1320.32
Bus or subway ride 2.52 0.96 1.8 1.31 0.72
Music CD 21.60 22.80 23.98 24.01 25.27
1 issue of international
daily newspaper 2.52 2.15 2.4 2.99 2.10
1 cup of coffee, including
service 2.99 5.04 2.64 2.77 3.80
Fast food hamburger meal 5.71 8.70 6.60 7.32 5.06
Source: Mercer Human Resource Consulting
Cost of living comparisons in US$s — 2006
Selected cities worldwide
(NB purchases at medium-priced establishments)
Warsaw Zagreb Tokyo Beijing Sydney
Rent of a luxury two bedroom
unfurnished apartment (per
month) 1320.32 1320.32 4116.02 2673.21 1931.77
Bus or subway ride 0.75 N.A. 2.31 N.A. 1.86
Music CD 23.66 23.80 21.44 21.14 19.30
1 issue of international
daily newspaper 3.15 N.A. 1.30 4.36 2.85
1 cup of coffee, including
service 3.47 4.11 2.57 4.24 2.61
Fast food hamburger meal 4.88 4.52 5.23 2.56 4.80
Source: Mercer Human Resource Consulting
Cost of living comparisons in US$s — 2006
Selected cities worldwide
(NB purchases at medium-priced establishments)
Buenos Aires New York Johannesburg Vancouver
Rent of a luxury two bedroom
unfurnished apartment (per month) 3497.38 999.25 968.26 1406.77
Bus or subway ride 2.00 0.26 N.A. 1.98
Music CD 18.85 12.04 29.77 18.57
1 issue of international daily
newspaper 1.63 4.55 3.87 3.29
1 cup of coffee, including service 3.96 1.47 2.26 2.85
Fast food hamburger meal 6.00 2.77 3.22 4.88
Mercer Human Resource Consulting – www.mercerhr.com
