The most expensive cities worldwide - 2016

Expat cost of living ranking

Tokyo is once again the most expensive city for expats

The Japanese capital is back on the top spot it had occupied during years until 2012.

The yen fluctuations had it down the podium and they now send it up again, thus overtaking Hong Kong. What made the difference is the yen revaluation in June.

Hong Kong is now the world’s 2^nd most expensive city after only a few months on the top spot.

Luanda, Angola’s capital, is now 3rd, after having fallen from top spot in March 2015 and even left the top 15 in March 2016.

Short-term number ones

During the last two years, exchange rates have regularly strongly fluctuated and no less than four cities have occupied the top spot in the world’s ranking of the most expensive location for expats.

The most expensive cities for expats in 2016 – worldwide ranking

Highlights

Luanda – Angola’s capital has often been among the top 3, but had never been number one before March 2015. This was not for long since Hong Kong overtook Luanda end of 2015. Due to the kwanza devaluation, the most expensive location in Africa tumbled down the ranking, falling below the top 15 most expensive cities at the beginning of 2016. Exchange rate stabilisation and inflation increase in 2016 have helped Luanda move up the ranking, back to top 3 again.

Singapore is now more expensive than Shanghai, due to its very high rent prices.

European cities hardly appear in this top 30. Apart from the Swiss cities (Geneva 4^th, Zurich 10^th, Lausanne 15^th, Bern 22^nd and Basel 27^th), the only other European cities are London 12^th and Copenhagen 26^th. Euro zone locations rise in the ranking, but remain far from the top: Paris, most expensive euro zone city, only ranks 44^th.

London, that was 2^nd most expensive location in the world a year ago, has fallen down by 11 places, reflecting the pound depreciation after the vote in favour of ‘Brexit’.

It is worth underlining that London remains among the most expensive cities in the world because of the incredibly high prices of its residential rents, particularly in the city centre.

United Arab Emirates cities continue to progress in the ranking: Abu Dhabi is 19^th and Dubai 25^th.

Moscow - In 2013, Moscow had overtaken Tokyo and become the most expensive city for expats, not only because of its high prices, but also thanks to the yen devaluation at that time. It is another devaluation, the ruble one, that has precipitated its fall in the ranking below the top 30 in 2015. The Russian capital now ranks 23^rd.

Brazilian cities continue to rise in the ranking, help by the strengthening of the real. Sao Paulo and Rio de Janeiro are now back to the top 50.

Regional tops

Africa

In spite of its fall down the global ranking, Luanda remains the most expensive African location for expats, ahead of Kinshasa and N’Djamena.

The historically low level of oil prices has generated the currency devaluation of Africa’s first two oil producers (Angola and Nigeria), thus making those countries cheaper to live in for expats.

Although Luanda remains the most expensive city in Africa for expats, and third most expensive worldwide, the cost of living for expats has lowered after the strong kwanza devaluation in mid 2015. During the last year, the kwanza has depreciated by more than 20%. This devaluation has engendered inflation; that is why Luanda remains at the top.

Lagos, Nigeria, has plummeted down the global ranking and is now only 189^th.

The reason for this fall is the collapse of the local currency. In June 2016, Nigeria’s central bank decided to allow the naira exchange rate to be market-driven and no longer pegged to the US dollar. The immediate consequence has been a ±30% devaluation and, since then, the naira has continued its depreciation. The impact of this devaluation on the cost of living for expats is a proportional drop, even though it is mitigated by inflation. A sharp rise of the cost of living is expected in the coming months because the usual consequence of such a devaluation is a strong inflation.

South Africa region has particularly suffered from currency fluctuations and that is why South Africa, Botswana, Mozambique and Namibia are amongst the cheapest countries in the world.

The strongest devaluation concerns Mozambique where the yearly depreciation reached 40%; as a result, Mozambique has notably dropped in the ranking.

Other African countries have seen their currency depreciate and lose places in the ranking. This is particularly true for Guinea and Kenya.

Americas

USA eclipse the other American countries: New York, San Francisco and Honolulu that are present in the world top 20 are followed in the American ranking by Washington, Boston and Los Angeles.

Brazilian cities markedly progress, due to the progressive reinforcement of the real over the last year. Sao Paulo and Rio de Janeiro are 40^th and 42^nd respectively in the global ranking.

Buenos Aires, Argentina’s capital, continues to fall down the ranking.

Its peso has lost more than 35% of its value after the country lifted currency control in December 2015. Although inflation continues to be very strong, the cost of living for expats keeps going down.

At the bottom of the American ranking, Paraguay is also one of the bottom 10 countries of the world.

Asia and Middle East

This region of the world is well represented in our world top 30 with no less than fifteen cities!

Tokyo is of course first, ahead of Hong Kong. Singapore 3^rd has overtaken Shanghai, helped by the very high level of its rent prices.

Mumbai, first Indian city, remains in the global top 20: 18^th.

The cheapest countries in the region are Tajikistan and Mongolia. Dushanbe and Ulan Bataar are indeed among the 20 cheapest cities in the world.

Beirut remains the most expensive city in the Middle East, ahead of Abu Dhabi and Tel Aviv. This first spot is the consequence of the particularly high rent prices in the secure areas of the Lebanese capital.

Kazakh cities continue to plummet down the ranking: the tenge has again lost 30% over the last twelve months. The cost of living for expats in Almaty and Astana is now similar to the one in Belgrade or Sofia.

Europe

Geneva remains the most expensive European city, ahead of Zurich and London.

Its extremely high rent prices make Geneva more expensive than Zurich.

In spite of the pound devaluation, London is still in the regional top 3 because of the unbelievable level of its rent prices.

All British cities drop places in the ranking as a consequence of the pound devaluation.

Paris, first euro zone city, is 10^th in the regional ranking and ranks 44^th worldwide.

Kiev had plunged in the ranking because of the drastic devaluation of the hryvnia; although the depreciation continues, Ukraine’s capital has climbed again in the ranking.

From 14^th in the European ranking in 2013, it has fallen to 87^th. The cost of living for expats in Kiev is now comparable to that in Sofia.

Turkish cities have well progressed in the ranking. Istanbul is now 13^th in the European ranking and 52^nd globally; Ankara ranks 24^th in the regional ranking and 52^nd globally.

Oceania

Sydney remains the most expensive city in the region, ahead of Honiara (Solomon Islands) and Canberra. Suva (Fiji) remains the cheapest.

The 2016 cost of living ranking from EuroCost International is based on prices collected in June 2016 and updated with August 2016 exchange rates.

This study compares expat living costs in major locations worldwide, including housing costs, but excluding health and education costs.

 

METHODOLOGY

EuroCost International’s cost of living surveys aim at comparing the cost of living for expatriates worldwide. They cover the whole basket of goods and services consumed by expatriates, excepted health and school costs (specific reports are provided for the latter).

The ranking is based on surveys conducted in June 2016 and includes rental costs. It should be noted that the rent prices used in this study are those paid by expatriates and that they are not representative for average rents paid by local inhabitants of the surveyed locations.

Rent prices used for this ranking are average rents for different types of housing favoured by expatriates and collected in the specific areas where they live. In some cities, prices for a specific type of housing can significantly differ from one area to another. This is for example the case for London, Mumbai or New York. Detailed information per city can be obtained in EuroCost International’s rent surveys.