World's Most Expensive (and Cheapest) Cities
The findings are part of a report entitled “Worldwide Cost of Living 2017” that ranks 133 cities by comparing more than 400 individual prices across 160 products and services. (For more see: Top 10 Most Expensive Cities in the U.S.)
About the Survey
The Worldwide Cost of Living (WCOL) survey, which has been conducted for the past 30 years, is undertaken twice annually, in March and September. Its price comparisons for the 160 products and services examined include food, drink, clothing, household supplies and personal care items. The survey also takes into consideration rent, transportation costs, utilities, educational costs, domestic help and recreation.
For comparison purposes, New York serves as the benchmark with an index score of 100. All other cities are ranked above or below that index, depending on the overall cost of living or of a particular product or service.
The Top (and Bottom) 10
In order, the 10 most expensive cities to live in (with the WCOL index score in parentheses) are: Singapore (120), Hong Kong (114), Zurich (113), Tokyo (110), Osaka (109), Seoul (108), Geneva (107), Paris (107), New York City (100) and Copenhagen (100). Note that New York is the only North American city in the top 10 – mostly due to a weak U.S. dollar, according to the EIU.
The 10 cheapest places to take up residence are Almaty, Kazakhstan (38); Lagos, Nigeria (39); Bangalore, India (42); Karachi, Pakistan (44); Algiers, Algeria (45); Chennai, India (45); Mumbai, India (45); Kiev, Ukraine (47); Bucharest, Romania (47) and New Delhi, India (47).
High Prices, Hidden Bargains
The Asian island city-state of Singapore is back as the most expensive city in the world for the fourth consecutive year. In fact, half of the world’s 10 most expensive cities are in Asia. Despite its wealth-oriented reputation, however, Singapore is also a city of bargains. When it comes to personal care, household goods and domestic help, Singapore is significantly cheaper than its peers, according to the EIU.
The city earns its high-cost stripes in other areas by remaining the most expensive place in the world to own and run a car and the second most expensive place to buy clothing. Singapore’s WCOL index score of 120 versus New York’s benchmark 100 reflects such items as table wine at $23.68 a bottle compared to New York’s average cost of $14.74 and a gallon of gasoline at $5.45 versus $2.31 in the Big Apple.
The Downside of Cheap
Residing in one of the cheapest cities in the world, on the other hand, can be costly in other ways. Political uncertainty, lack of security and poor infrastructure all exact a toll. As EIU points out, the two cheapest cities, Lagos and Almaty, are the least costly largely due to political and economic disruption. In a word, living in these cities can be dangerous.
The EIU also publishes a livability survey as a sister ranking to its cost of living survey. Last year’s EIU Livability Survey listed Lagos, Karachi and Algiers among the 10 least livable cities in the world. Those cities are also on this year’s 10 cheapest cities list. It’s worth noting that none of this year’s 10 most expensive cities showed up on last year’s 10 most livable cities list. A high cost of living, it would seem, does not necessarily buy you livability.
Cities that made the biggest positive moves in ranking from last year to this, according to this year’s EIU cost of living survey, came from emerging market economies. The survey also points out that last year’s Brexit vote and resulting drop in the British pound cost Manchester a 25-place plunge to 51st place and London an 18-place plunge from sixth to 24th place in 2017, its lowest spot in the cost-of-living ranking in 20 years.
The three key drivers of cost of living, according to Simon Baptist, regional director for Asia at the EIU, are the exchange rate, government policies and commodity prices. With specific regard to the exchange rate, Baptist said the rupee, yen and euro were expected to have a good year in 2017. Struggling currencies would include those in Brazil, South Africa, (South) Korea, Indonesia and China. (For choices in the U.S., see: Top 25 Cities Where You Can Live Large on Less Than $70K.)
The Bottom Line
The EIU survey demonstrates that Asia is clearly experiencing a “best of times, worst of times” scenario, with significant representation in both the top 10 most expensive cities to live in as well as the bottom 10 cheapest places to call home.
It’s important to note that the three key drivers that affect the cost of living – exchange rate, government policies and commodity prices – often interact. As an example, the political impact of Britain’s Brexit referendum last year resulted in a drop in the British pound.