Mercer publishes its 23rd annual Cost of Living Survey

Mercer’s 2017 Cost of Living Survey finds Asian and European cities – particularly Hong Kong, Tokyo, Zurich and Singapore – top the list of most expensive cities for expatriates. But the costliest city, driven by cost of goods and security, is Luanda, the capital of Angola.

Kate Fitzpatrick, Mercer’s Global Mobility Practice Leader for the UK & Ireland, said:

‘Currency fluctuations, including the weakening of both the British Pound and the Euro against the US Dollar, have had a major impact on this year’s rankings. As a result, many European cities have been driven down the ranking by around 10-20 places. However in some cases local conditions, for example availability of accommodation, have counter-balanced or exacerbated the impact of currency movements.’

Europe

• Only three European cities remain in the top 10 list of most expensive cities for expatriates. Zurich (4) is still the most costly European city, followed by Geneva (7) and Bern (10).
• London (30) dropped 13 spots as a result of the pound weakening against the US dollar.
• Other Western European cities dropped in the rankings as well, mainly due to the weakening of local currencies against the US dollar. Vienna (78) and Rome (80) fell in the ranking by 24 and 22 spots, respectively.

Middle East and Africa

• Ranking 17, Tel Aviv jumped two spots from last year and continues to be the most expensive city in the Middle East for expatriates followed by Dubai (20), Abu Dhabi (23), and Riyadh (52), which have all moved higher this year.
• Cairo (183) is the least expensive city in the region plummeting 92 spots following a major devaluation of its local currency.
• Luanda (1) takes the top spot as the most expensive city for expatriates across Africa and globally despite its currency weakening against the US dollar.

Americas

• Cities in the United States are the most expensive locations in the Americas, with New York City (9) ranked as the costliest city, climbing two spots from last year.
• In South America, Brazilian cities Sao Paulo (27) and Rio de Janeiro (56) surged 101 and 100 spots, respectively, due to the strengthening of the Brazilian real against the US dollar.
• Other cities in South America that rose on the list of costliest cities for expatriates include Lima (104) and Havana (151).

Asia Pacific

• Five of the top 10 cities in this year’s ranking are in Asia. Hong Kong (2) is the most expensive city as a result of its currency pegged to the US dollar, which drove up the cost of accommodations locally.
• Australian cities climbed up the global ranking as the Australian dollar strengthened. Sydney (25), Australia’s most expensive city for expatriates, jumped 17 places in the ranking.
• India’s most expensive city, Mumbai (57), climbed 25 places due to its rapid economic growth, inflation on the goods and services basket and a stable currency against the US Dollar.

Ilya Bonic, Senior Partner and President of Mercer’s Career business, said:

‘While historically mobility, talent management, and rewards have been managed independently of one another, organisations are now using a more holistic approach to enhance their mobility strategies. Compensation is important to be competitive and must be determined appropriately based on the cost of living, currency, and location.’

About the survey

The cost of living figures and rental accommodation costs comparisons are derived from a survey conducted in March 2017. Exchange rates from that time and Mercer’s international basket of goods and services have been used as base measurements.

New York is used as the base city and all cities are compared against it. Currency movements are measured against the US dollar. The survey includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit www.mercer.com/col. To purchase copies of individual city reports, visit www.imercer.com/products/cost-of-living.aspx