In March of this year, market research company Employment Conditions Abroad (ECA) International released a study which ranked the world’s most expensive cities for foreign workers to live. The report compiled a list of 207 cities in 120 different countries.
The survey was conducted by comparing accommodation data and similar consumer goods and services which are frequently bought by expats.
According to the research, the top 10 most expensive cities in the world are as follows:
- Hong Kong
- New York City, United States
- Geneva, Switzerland
- London, United Kingdom
- Tokyo, Japan
- Tel Aviv, Israel
- Zurich, Switzerland
- Shanghai, China
- Guangzhou, China
- Seoul, Korea
For the second year in a row, Hong Kong was ranked the most expensive city in the world for expatriates. This is largely due to a stronger currency and all-around higher prices. Despite being less impacted by inflation than any other location, it remains in first place. Pegged to the US dollar, the Hong Kong dollar has maintained its strength as other currencies around the world have weakened. The research showed that Hong Kong’s soaring prices for coffee, petrol, and tomatoes were some of the items that brought the city to the top.
Many cities in China have been rising in the rankings. Shanghai is now Asia’s third-most expensive city. The city also benefited from the yuan’s robust performance throughout the survey period. 5 cities in Asia have made the top 10 for most expensive, making Asia the most expensive continent to live.
Following in second and third place were New York and Geneva. London then came in fourth and Tokyo fifth. For London and New York, high rent costs were a large part of the reason for the placement. In London, the price of leasing property increased by 20% in the past year and 12% in New York.
Because of an unexpected jump in inflation and negative interest rates, the yen weakened, and Japan slipped in the rankings. The yen is currently at a seven-year low against the euro and a 20-year low against the US dollar. The weaker the yen is, the cheaper it is for expatriates who are paid in other currencies. This will take their money farther.
Singapore, which is known for its high-income and cost-effective regulatory environment, remained in 13th place. The Singapore dollar weakened during the survey period, even though there have been significant increases in petrol prices, utility costs, and rent. Additionally, Laos, Myanmar, and Thailand all fell in the ranking despite high inflation rates and slow tourism recovery.
Following an unstable time for the euro, almost every major city within the eurozone dropped in rankings. In the last year, the euro performed worse than both the British pound and the US dollar. The research showed that Ankara, Turkey is the world’s cheapest city for foreign workers. Switzerland, however, which is not a member of the EU or European Economic Area (EEA), saw two of its cities in the top 10.
The city which saw the most price growth was Sri Lanka’s Colombo. The location moved into the 149th place, which is 23 places higher than last year.
As the demand for oil surges ahead of supply, fuel has become a major contributor to the rising cost of living which is occurring across the world. The war in Ukraine has significantly exacerbated inflationary pressures and added to economic uncertainty by altering the global commodity cycle. As Russia is the second-largest exporter of energy in the world, sanctions against the country have affected global energy supplies. Oil prices are up more than 70% since 2021.
Food prices are also reaching record highs and are expected to increase by a further 14% this year. This is on top of 2021’s 28% increase. Both Ukraine and Russia are huge contributors to the global wheat supply.
As well as having offices in Portugal and Spain, Private Client Consultancy works with clients across Europe. If you have any questions about how we can help you protect yourself against inflation and the cost-of-living crisis, contact us today.