Falling oil prices, global currency volatility, and geopolitics are shaking up the list of the worldâ€™s most expensive cities, according to the Economist Intelligence Unitâ€™s new Worldwide Cost of Living Survey.
Falling oil prices, global currency volatility, and geopolitics are shaking up the list of the world’s most expensive cities, according to the Economist Intelligence Unit’s new Worldwide Cost of Living Survey.
The report, which each year ranks the world’s major cities based on the price of a weighted basket of goods, noted that American cities are getting more expensive relative to the rest of the world. The good news is that means travel is cheaper for Americans who go abroad.
“In nearly 17 years of working on this survey I can’t recall a year as volatile as 2015,” said Jon Copestake, the survey’s editor, in a press release. “Falling commodity prices have created deflationary pressure in some countries, but in others currency weakness caused by these falls has led to spiraling inflation.”
Interestingly, two cities that are destined for an influx of tourists in the coming months are getting significantly less expensive. Rio de Janeiro, which hosts this summer’s Olympics is now the 113th most expensive city, a drop of 52 places. Moscow, which hosts the next men’s World Cup in 2018, was the biggest mover on the list, falling 63 slots to tie Rio.
The biggest movers in terms of getting more expensive where Beunos Aires, which moved up 28 spots to 62nd; San Francisco, which moved 25 spots to 34th; and Minneapolis, which was 48th last year, but now ranks as the 24th most expensive city in the world.
What follows are the 10 most expensive cities, according to the Economist Intelligence Unit’s survey, starting with a three-way tie for eighth place:
California’s largest city is also the state’s most expensive, according to the report. The city came in eighth place this year, a jump of 19 spots from its perch in last year’s report. However, the report’s authors note that the increase is more about currency fluctuation than about a major shift in the city’s economy. As our currency faces headwinds, the relative cost of the city is increasing. According to Zillow, the median home value in Los Angeles is a hefty $568,000.
8 (tie). Seoul
The capital of South Korea is no newcomer to the list, though it did move up one slot in the 2016 edition of the survey. Seoul was cited in particular for the high costs of every day goods. Its groceries are the world’s most expensive, costing about 33% more than groceries do in the world’s overall most expensive city. The average cost of a bottle of table wine in the city is $25 (in US currency), the study found. Expensive clothing and utility costs also raise the cost of living significantly, the authors said.
8 (tie). Copenhagen
Copenhagen stays at No. 8 for the second-straight year. However, the high costs may not bother most travelers, since food and grocery prices were relatively low compared to many of the cities on the list. Meanwhile, high transportation and housing costs eat into the budgets of the city’s 560,000 inhabitants.
7. New York City
America’s most expensive city is also one of the world’s most expensive cities. However, that wasn’t always the case. New York wasn’t even in the Top 20 last year. The same currency issues that propelled Los Angeles into the Top 10 — a strong dollar and local inflation – are at work here. Just five years ago, New York was only the 49th most expensive city.
London moved up five spaces this year. Like New York, it’s a city that has developed a reputation as being expensive. According to the price-tracking website Expatistan, London has the world’s most expensive public transportation and Western Europe’s most expensive rent. The site says a furnished studio apartment in an expensive part of the city can put you back more than $2,200 per month.
Not so far from London in distance and in prices, Paris’ residents pay a hefty fee for living amid the beauty of the City of Lights. Alcohol and tobacco are relative values in the city, but that’s about it, according to The Economist’s report. The only Euro-zone city on the list, housing and entertainment are among the high-cost items for visitors and residents.
Switzerland is known as a country of luxury, so you can’t say you haven’t been warned. Geneva, which is in the French-speaking zone of the country, is one of two Swiss cities that ranked as the world’s most expensive places for entertainment and recreation. Geneva moved up three spots from last year’s ranking.
2 (tie). Hong Kong
Hong Kong moved up seven places this year to near the very top of the list. The city’s groceries are among the most expensive in the world, about 28% more expensive than groceries in New York City. A 900-square-foot furnished apartment costs $4,800 per month in rent, according to Expatistan.
2 (tie). Zurich
Just a tad more expensive than Geneva, Zurich is the second-most expensive city in the world, according to The Economist. The report says the decoupling of the Swiss franc to the Euro has upped costs in the city, and “structurally high income and price levels” also plague would-be penny-pinchers. Like Geneva, Zurich’s entertainment and recreation costs are the most expensive cited in the list.
Singapore remains at the top of the list for another year, although the gap between Singapore and the other cities is narrowing, The Economist reports. Transportation costs in Singapore are nearly three times the transportation costs in New York, and clothing and utilities are also high compared to almost everywhere else. On the bright side, its groceries are a relative value, the report said.
Source: The Economist Intelligence Unit’s Worldwide Cost of Living Survey.