The Economist Intelligence Unit (The EIU) of The Economist Group announced its Worldwide Cost of Living 2017. Singapore continues to be the world's most expensive city for the fourth year running. The survey, which compares the price of over 150 items in 133 cities around the world, found that Singapore was 20% more expensive than New York and 5% pricier than Hong Kong, which lies in second place.
Asia now hosts five out of the top six ranked cities in the world, with four European cities and New York joining them to complete the top ten.
The latest survey has also seen a return to the top ten most expensive cities for Tokyo and Osaka. The Japanese capital, which was the world’s most expensive city until 2012, has moved seven places up the ranking owing to a sustained recovery in the strength of the Japanese yen. With Japanese cities returning to the fold, Asia now accounts for half of the ten most expensive cities ranked.
Western Europe accounts for a further four cities, while New York City is the lone North American representative. The Big Apple, which rose to seventh place last year, has fallen to ninth owing to a slight weakening of the US dollar, which has also affected the position of other US cities. This, however, still represents a comparatively sharp increase in the relative cost of living compared with five years ago, when New York was ranked 46th.
While Asia dominates at the top of the index it was Australasia and Brazil which saw the fastest rise in the relative cost of living this year. Conversely, continued uncertainty from the Brexit referendum has weighed on the strength of the British pound, pushing the UK cities of London and Manchester sharply down the rankings, with London at its lowest position in 20 years.
Istanbul was among the biggest movers and ranked at 62nd place.
With the strength of the US dollar moderating and the euro remaining relatively stable, currencies such as the Canadian dollar, the Australian dollar and the New Zealand dollar have appreciated in value. As a result, Sydney and Melbourne in Australia, and Wellington and Auckland in New Zealand all feature among the 20 most expensive cities. Although the relative cost of living has fallen slightly in the Swiss cities of Zurich and Geneva, both remain cemented among the ten most expensive, in third place and joint seventh place respectively. Joining Geneva in seventh place is Paris, which has featured among the ten most expensive cities for 15 years, although the relative cost of living in the French capital has moderated. Currently, living in Paris is 7% more expensive than living in New York, but just five years ago it was 50% pricier.
Last year deflation and devaluations were a prominent factor in determining the cost of living, with many cities falling down the ranking owing to currency weakness or falling local prices. Both prices and a number of currencies rallied during 2016 and, although inflation in many cities has remained moderate, the impact is reflected in the average cost of living. Taking an average of the indices for all cities surveyed using New York as base city, the global cost of living has risen to 74%, up slightly from 73% last year. This remains significantly lower than five years ago when the average cost of living index across 132 cities was at an all-time high of 93.5%
US cities fall back but Chinese cities fall further
With the dollar weakening slightly against other currencies, New York is the only North American city among the ten most expensive cities, although Los Angeles remains highly ranked, in 11th place, down from eighth place last year. Although recent years have seen the relative cost of living in US cities rise, the latest ranking reflects a fall for all but two (San Francisco and Lexington) of the 16 cities surveyed.
Weakening consumption growth and a steady devaluation of the renminbi has resulted in China’s urban centres moving down the ranking by between five and 16 places each.
Paris is the only euro zone city among the ten most expensive. The French capital remains structurally extremely expensive to live in, with only alcohol and tobacco offering value for money compared with other European cities. The Danish capital, Copenhagen, which pegs its currency to the euro, also features in the ten priciest, largely owing to relatively high transport and personal care costs.
When looking at the most expensive cities by category, it is interesting to note that Asian cities tend to form the priciest locations for general grocery shopping. However, European cities tend to be priciest in the recreation and entertainment categories, with Zurich and Geneva the most expensive, perhaps reflecting a greater premium on discretionary spending.
And the 10 cheapest cities in the world
