In examining cities with the highest cost of living, the price of housing is generally the largest factor impacting these expenses. Rentals can vary hugely depending upon country, state, city or neighborhood. The national average rental price for a two-bedroom apartment in the United States tends to be around $1,000 per month, though in the world's most expensive cities you might not even be able to rent a closet for that amount. (Find out what you can do to find a fabulous apartment to fit your budget. See 6 Tips For Renting An Apartment.)

TUTORIAL: Exploring Real Estate Investments

The capital city of Japan has always been known for having an exceptionally high cost of living. Tokyo has held the top spot on the list of most expensive cities for housing rentals for a number of years with this year showing another increase in the average rental cost. According to the consulting group ECA, the average two-bedroom apartment in Tokyo costs $4,352 per month. These rates can be lower if you're flexible on the size of dwelling, location and amenities. Choosing to live in the suburbs can definitely save you money, but with that comes an increase in commute time and transit costs.

Russia's largest city takes the second spot on ECA's list of most expensive cities to rent a home. The average rental cost for a two-bedroom apartment is $3,500 per month. Perhaps it's not surprising that Moscow experiences such high rental costs since this European city is also known for being home to a large number of billionaires. Since the majority of Moscow's residents don't fall into the billionaire category, they certainly do face a particularly high cost of living.

Hong Kong
Considering China's economic growth over the recent decades, Hong Kong has become a world center in terms of trade and commerce. Hong Kong took third spot on ECA's list of most expensive home rentals, with the average monthly cost of a two bedroom apartment coming in at $2,830.

If you've always wanted to live in posh London town, you'd better make sure you've got deep pockets first. ECA calculates that the average two-bedroom flat costs about $2,824 a month in rent. Because London is still a top location for business and commerce in Europe, this brings many expatriates to the United Kingdom each year, and like many of the cities on the top of ECA's list, space in London is at a premium with rental prices (and the size of rental spaces) reflecting this.

Another AsianCity finishes off ECA's top five cities. Singapore has become a popular business destination, and housing prices definitely reflect the influx of business people, workers and economic growth. A two bedroom apartment rents for $2,810 on average. (Here are three simple questions you should consider when weighing this decision. Check out Retirement Living: Renting Vs. Home Ownership.)

Abu Dhabi
The United Arab Emirates has become synonymous with wealth over past decades, especially with the growth of Dubai as a major destination for business people and vacationers alike. However, it is Abu Dhabi, also a major city in the United Arab Emirates, that tops Dubai when it comes to the cost of home rentals. Both cities have seen a decline in rental prices over recent years. The garden city of the gulf is home to a large number of expatriates-and luckily for them, rents in this region are expected to continue to decline. As it stands today, most listings in Abu Dhabi for a two-bedroom unit of 1000 square feet come in at about $2,500.

San Francisco
Considering San Francisco's proximity to the Silicon Valley and many of the top technology companies in the world, it's no surprise that this city has a high cost of living - and there's also a lot of competition when it comes to landing good apartments. The average rental cost for a two-bedroom unit runs in the range of $2,100 per month.

Though Paris had formerly been found on the ECA's list of most expensive cities for home rentals, this famous city of romance has now fallen out of the top 10. Despite Paris' decline in the rankings, a two-bedroom apartment will still cost about 1,650 euros - that's about $2,390.

New York City
Who would have guessed that the financial mecca that is New York City wouldn't have made the top 10 on ECA's list? New York City comes in a modest 17th place on the list. This famous city is known as one of the most expensive places to live, though the fair market value for a two-bedroom apartment is currently estimated at $1,359 according to the Center for Housing policy. Comparatively, the fair market value for a two-bedroom apartment in Suffolk-Nassau on Long Island has been calculated at $1,592 per month. Though these rates are higher than the national average, they're still far more affordable than many of the cities falling into the top 10 on ECA's list. Keep in mind that the rental rate varies greatly depending upon which borough you're looking to rent a property in. Tribeca and Soho are among the most expensive in the Manhattan area, and Harlem is one of the least. Also, many apartments in Manhattan are rent-controlled as a method of keeping them more affordable.

The Bottom Line
Many factors impact housing prices - both for home purchases and rentals. Supply and demand may be one of the most important factors in determining pricing, though industry has a huge amount to do with it. As long as there's a certain amount of cachet associated with these locations and people continue to move to these cities to further their careers the prices will continue to hold. If you are planning a move to any big city, it's a good idea to investigate the rental rates in the area and know what you're getting into. Keep in mind that living in the suburbs and commuting into the city each day will almost always stretch your money further - though there are always exceptions when it comes to ultra trendy suburbs. Do your homework, because you'll definitely want to make sure that you'll earn enough to cover your expenses, or you might just want to consider finding a roommate. (Renting out your home can be a great way to ride out a real estate slump - if you do it right. Check out Top Tips For Successfully Renting Out Your Home.)

Related Articles
  1. Home & Auto

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  2. Entrepreneurship

    Top 5 Startups that Emerged in London

    Learn why London's startup scene is so prolific, and identify some of the hottest companies emerging from this scene as of mid-2015.
  3. Active Trading Fundamentals

    The 4 Biggest Private Equity Firms in London

    Discover information about the largest private equity firms that are headquartered in London, ranked by total assets under management.
  4. Home & Auto

    Living in New York City: Co-ops vs. Condos

    Buying an apartment in New York City means familiarizing yourself with the pros and cons of these two types of dwellings.
  5. Active Trading Fundamentals

    The Biggest Private Equity Firms in San Francisco

    Learn about some of the larger private equity firms with a presence in San Francisco, including KKR, the Blackstone Group and Warburg Pincus.
  6. Entrepreneurship

    Top 10 Startups That Emerged in New York City

    Understand why the startup scene has grown, and discover why it has become a large part of New York City. Learn about the top 10 New York City startups.
  7. Forex Education

    A Day In The Life of A Professional Forex Trader

    The professional forex trader lives an affluent lifestyle but pays the price with many hours of research and market watching.
  8. Active Trading Fundamentals

    The Biggest Private Equity Firms in New York City

    Discover the top four largest private equity firms, including Goldman Sachs, headquartered in New York City, as ranked by total assets raised since 2010.
  9. Investing Basics

    Learn About the New York Stock Exchange

    The New York Stock Exchange (NYSE) is nicknamed the “Big Board,” and for good reason. It’s the largest, oldest and best-known stock exchange in the world.
  10. Retirement

    Is Cohousing Right for You?

    Cohousing isn't for everyone. But if you're community-minded or committed to living green, it may be an ideal option for you.
  1. Enterprise Investment Scheme (EIS)

    A UK program that helps smaller, riskier companies to raise capital ...
  2. Asian Infrastructure Investment ...

    The Asian Infrastructure Investment Bank (AIIB) is an international ...
  3. Hong Kong SAR, China

    Hong Kong is a financial and business center in China.
  4. Working Tax Credit (WTC)

    A tax credit offered to low-income individuals working in the ...
  5. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  6. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  1. What are some of the drawbacks of industrialization?

    In economic history, industrialization is the social and economic transformation of the human group from an agrarian society ... Read Full Answer >>
  2. How autonomous are special administrative regions?

    When most people think of special administrative regions, or SARs, they are referring to Hong Kong and its relationship with ... Read Full Answer >>
  3. Can a special administrative region declare autonomy?

    Special administrative regions, or SARs, namely Hong Kong and Macau, do not declare autonomy so much as they are granted ... Read Full Answer >>
  4. What countries are currently considered to be special administrative regions?

    The two countries, both under the overall sovereignty of the People's Republic of China, designated as special administrative ... Read Full Answer >>
  5. How can I increase my standard of living in my retirement years?

    If you're decades away from retirement, the best way to ensure a decent standard of living during your golden years is to ... Read Full Answer >>
  6. What caused the American Industrial Revolution?

    The initial vestiges of industrialization appeared in the United States in 1790, when Samuel Slater opened a British-style ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!