A comparison of food, clothes, shelter, transportation, and entertainment costs of the world's cities.
Would you rather pay $23 dollars for a movie ticket or just $8? Answering that question is not as straightforward as it seems at first glance. Although these are the average amounts paid respectively by moviegoers in London (United Kingdom) and Brazzaville (Republic of Congo) for a trip to the cinema, Brazzaville’s cheaper movie ticket comes with additional risks: the central African nation has been plagued by years of wars and militia conflicts. On top of that, half of the population lives in poverty, and outbreaks of infectious diseases and pandemics are recurrent events.
What is surprising is that the two capitals are tied for 19th place in the 24th edition of the Cities Cost of Living Survey ranking compiled by global consulting firm Mercer. (Click here to see the full ranking.) Cost of living indexes measure the relative price levels for consumer goods and services compared against other local and international averages. They are also used to calculate wages, pension benefits and tax brackets. Many people may also glance at them when planning a vacation or when deciding on job or educational opportunities.
There are many—and often opposite—reasons why the cost of living in two cities can be similar. Steep prices often come with better standards of living, job opportunities, and infrastructure. On the other hand, because in some places a significant percentage of the local population lives under the poverty line, housing and other expense items can be very costly luxuries.
Cities are also more interconnected than ever and so external dynamics can lead to great spikes or dramatic declines in prices in very short amounts of time. Currency fluctuations are often a major cause for changes in the ranking and when tensions rise between two countries, investment, jobs and living standards can suffer greatly on both sides as a result.
Less clear is how the ripple effects caused by certain domestic policies affect other corners of the world. Trying to weigh all of the global, national, and local elements that enter into determining the price of a car, a pair of jeans or a movie ticket is mind-boggling.
With land in short supply and property prices rising, Hong Kong emerged this year as the most expensive city in the world. Mercer’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment. Six out of ten of the most expensive cities are now in Asia, with Hong Kong followed by Tokyo (2), Singapore (4), Seoul (5), Shanghai (7), and Beijing (9).
The reason for their surge? Stronger monetary regulation and a push to transform the yuan into an international currency nudged Chinese cities up in the ranking. While Tokyo moved up one position from last year despite a depreciation of the yen, all other Japanese cities fell in the survey. Australian locations have all dropped in the list too: cities that fall in the middle of the ranking, the folks at Mercer note, are at greater risk of experiencing changes in their positions due to the movement of other cities.
Meanwhile, Indian cities remain cheap: Mumbai (up two spots at 55) is the most costly and the only in the top 100. Elsewhere, Kuala Lumpur (145) jumped 20 places from last year, while Bangkok (52) rose fifteen slots. To drink the most expensive coffee in the world, one must go to Seoul, up one place from last year: one cup will set you back as much as $10.
No North American city ranks this year among the 10-most expensive worldwide: the highest-ranked city, New York (13) dropped four places while San Francisco (28), Los Angeles (35) and Chicago (51) dropped seven, 12 and 20 places respectively.
Does that mean that renting an apartment in Manhattan has suddenly become affordable? No: on average, renting a two-bedroom unfurnished apartment in the Big Apple still costs about $5,700 a month. Falling in the ranking in comparison to other locations does not necessarily mean that the cost of living in a given place has gone down too, and this is particularly evident in South America, where most of the cities dropped in the survey despite price increases on goods and services. In particular, Rio de Janeiro (99), Lima (132) and Bogota (168) plummeted 43, 28 and 15 places, respectively. São Paolo (58) ranked as the costliest city in the region despite a 32-place drop from last year, followed by Santiago (69). Caracas has been excluded altogether from the ranking due to the loss of value of the Venezuelan Bolivar.
Most Canadian cities fell in the ranking too: Vancouver (109) by two spots, Montreal (147) and Calgary (154) by 18 and 11. The exception is Toronto (109), the country’s highest-ranked city and a popular destination among expats, which jumped 10 places due to an increase in housing costs.
European cities climbed this year’s ranks due to the appreciation of the Euro. Paris jumped 28 places (34), Rome (46) is up 34 places and Madrid (64) leaped 47 slots. German cities in particular have become more expensive, with Frankfurt (68) and Berlin (71) both jumping 49 spots. Birmingham (128) and Aberdeen (134) in the UK jumped 19 and 12 spots, respectively, despite the Brexit-driven economic slowdown.
A fast-food burger in Zurich, the most costly European city and the third most expensive place to live worldwide, now costs $15.
Meanwhile, in Eastern and Central Europe, Moscow (17), St. Petersburg (49) and Kiev (173), dropped four, 14 and 10 spots. Why? If the US dollar has weakened, their local currencies have weakened even more.
The Middle East
Over the past decade, Tel Aviv (16) has been climbing steadily Mercer’s ranking: it is now the most expensive city in the region. While currency appreciation played a role, significant factors are the very high cost of alcohol and the cost of buying, insuring and maintaining a car. Cairo (188) remains the least costly city in the Middle East and most places in the region surveyed by Mercer have dropped in the list due to decreases in rental accommodation. Tashkent (209), in Uzbekistan, is an exception, although while it rose 10 spots on a global level it remains the least expensive city in the region and in the entire survey.
Pop question: What is the capital of Angola? The answer is Luanda, and for many years in a row it topped the list of the most expensive cities in the world. Luanda is a perfect example of where the high cost of living is driven by massive income inequality: while the majority of its population is living in slums, expats and locals made rich by the oil industry live in luxurious housing compounds. War left Angola with barely any infrastructure for manufacturing and even agricultural activities: as a result, everything is imported, resulting in astronomical prices. Despite losing the top slot globally, the Luanda (6) remains Africa’s most expensive city to live in. N’Djamena (8), in Chad, follows, rising seven places, while Libreville (18), in Gabon, moves up moves up 14 spots.
On the opposite end of the ranking, the beautiful Tunis (208) and the capital of Gambia, Banjul (206), are two of the cheapest cities in the world to live in.
Cost of Living in Cities Around the World
|13||New York City||United States|
|19||Brazzaville||Republic of the Congo|
|26||Dubai||United Arab Emirates|
|28||San Francisco||United States|
|35||Los Angeles||United States|
|37||Kinshasa||Dem. Rep. of the Congo|
|40||Abu Dhabi||United Arab Emirates|
|48||Bangui||Central African Republic|
|79*||White Plains||United States|
|95*||San Juan||Puerto Rico|
|97||Port of Spain||Trinidad & Tobago|
|100||Rio de Janeiro||Brazil|
|104||Pointe A Pitre||Guadeloupe|
|106||Bandar Seri Begawan||Brunei|
|122||St. Louis||United States|
|124||Ho Chi Minh City||Vietnam|
|125*||Port Au Prince||Haiti|
|141||San Jose||Costa Rica|
|161*||Winston Salem||United States|
|170*||Cape Town||South Africa|
|174||San Salvador||El Salvador|
|178||Santo Domingo||Dominican Republic|
|180||Dar Es Salaam||Tanzania|
|191||Sarajevo||Bosnia and Herzegovina|
*Cities tied in Mercer’s ranking.