Expatriate International Cost of Living

This article is well worth the time taken to read as it looks at where your city lies within the cost of living rankings worldwide.

International Cost of Living Rankings

International cost of living rankings are the result of comparing the cost of an expatriate’s personal budget, using the local prices for the same defined quantities of the same goods and services in each country throughout the world.

Our findings show that the compound impact of the multifaceted global economic trends that impact each country in one way or another, are contributing to rapid substantial changes in the relative cost of living of countries around the world. The changes in relative cost of living are large and have occurred in a relatively short period of time. The reason for this is due to the fact that so many economic crises are occurring simultaneously. 2008 saw the housing bubble burst followed by the failure of a number of global fund / asset management, insurance and banking giants. Some have been liquidated or taken over; others have been bailed out with government funds. In 2009 we have seen the continued fall in house prices which many believe have yet to bottom out. Stock prices and market indexes are down to levels last seen a decade or more ago. The trend towards decreased inflation and lower interest rates continues in developed and developing markets. We are also experiencing exchange rate volatility with a number of large economies seeing their currency weaken considerably in the past year. The economic impact is continuing to spread around the globe. We are currently seeing a truly global recession with reduced demand for manufacturing inputs and outputs as well as reduced energy demand and large scale job losses.

This study of 276 global locations covered every country in the world. The study comprised the cost of several hundred items that expatriates typically spend their pay on, grouped into 13 Basket Groups. The findings as at 1 April 2009 have been compared to the previous findings of 1 December 2008. The Index uses New York as the base (New York = 100). An index greater than 100, means that the cost of living is higher than New York, an index less than 100, means that the cost of living is lower than New York.

Geneva has a cost of living index of 110 for example. That means that on average, goods and services that cost $100 in New York, cost $110 in Geneva. Each city is ranked according to their overall cost of living index which includes the cost of all basket groups.

A cost of living index increases or decreases based on the local price of the goods and services used in the study and the ruling exchange rate. As a general principle, a country with a currency that has increased against other currencies (stronger currency) and which has relatively high local inflation (rapid/large price increases), will generally experience an increase in cost of living compared to other countries. On the other hand, a country with a currency that has decreased against other currencies (weaker currency) and which has relatively low local inflation will generally experience a decrease in cost of living compared to other countries. It is important to note that we are talking about relative changes. Take London as another example. As recently as December 2008, London was still ranked the 6th most expensive place in the world for expatriates to live. As at April 2009 it is the 23rd most expensive place in the world for expatriates. That does not mean that the local cost of living for expatriates living in London has decreased. What it does mean is that relative to other places in the world, London is no longer as expensive as it was last year. What makes London’s cost of living relatively lower than it was is mainly due to the increase in the cost of living elsewhere together with the weaker British Pound.

These relative changes have a substantial impact on expatriate employees. An expatriate working in a high cost of living – strong currency country such as Hong Kong where the Hong Kong Dollar is pegged to the US Dollar illustrates this point. The high cost of living makes it difficult to save due to high local prices; Household (Accommodation including utilities) in particular is very expensive. However, an expatriate working in Hong Kong will now likely find that remitting money back home provides greatly increased spending power at home. In the past year the Hong Kong Dollar has increased 15% against the Malaysian Ringgit, and 30% against the Indonesian Rupiah and the Australian Dollar.

The Top 10 Most Expensive Places for Expatriates to Live

Tokyo has retained its status as the most expensive city in the world for expatriates to live. The cost of living index for Tokyo has increased from 126 in December 2008 to 143 as at 1 April 2009, and the Yen has strengthened against the US Dollar. At the other end of the scale, Harare has retained its status as the least expensive city in the world and is ranked 276 with an index of just 17 and a currency which is still in free-fall. Tokyo is ranked 1st for Healthcare expenses, 2nd for Groceries and 2nd for Household (Accommodation including utilities).

Hong Kong is now ranked 2nd overall having climbed from 33rd place in December 2008. Its cost of living index has increased from 103 to 121 and is ranked 1st for Household expenses and 2nd for Healthcare. It is interesting however to note that Hong Kong is not expensive in all categories. It is ranked 202nd for Alcohol & Tobacco, 226th for Recreation & Culture, 227th for Education, and 247th for Furniture & Appliances.

Lagos is the 3rd most expensive city in the world for expatriates, having previously been ranked 11th. It is ranked 1st for Groceries and for Furniture & Appliance expenses, 6th for Healthcare, and 18th for Restaurants, Meals Out and Hotels.

Caracas has moved substantially up the rankings to 4th, having been ranked just 32nd in December 2008. It is ranked 1st for Education expenses, 5th for Healthcare, and 6th for Household expenses (Accommodation including utilities).

Port Moresby in Papua New Guinea is the 5th ranked overall most expensive city for expatriates due to most goods and services being imported from Australia. Port Moresby is ranked 6th for Recreation & Culture, 7th for Communication and for Healthcare, and 8th most expensive for Clothing.

Geneva has dropped slightly to 6th, having been ranked 4th in December 2008. It is ranked 3rd most expensive for Transport expenses, 11th for Recreation & Culture, 15th for Healthcare, and 20th for Clothing.

Dubai has moved into the top 10 most expensive places in the world for expatriates to live for the first time. Dubai is now ranked 7th, substantially up from 34th in December 2008. Its cost of living index has increased from 103 to 109 since December 2008. It is ranked 1st for Restaurants Meals Out and Hotel expenses, 6th for Clothing, 11th for Healthcare, and 16th for Groceries. Dubai is currently ranked 4th for Household expenses (Accommodation including utilities), however evidence is emerging that this will decrease significantly in the next quarter as it has been hit relatively hard in the property sector with falling property prices and rentals.

Doha has moved up in the global rankings faster than any other city. In December 2008, Doha was ranked the 45th most expensive city for expatriates, it is now 8th. The overall cost of living index has moved up from 101 to 109, equal to that of Dubai. It is ranked 2nd for Restaurants, Meals Out and Hotel expenses, 3rd for Clothing, 7th for Household expenses (Accommodation including utilities), 8th for Groceries as well as for Recreation and Culture, and 10th for Healthcare.

Denmark has dropped slightly to being the 9th most expensive place in the world for expatriates, having been ranked 3rd in December 2008. It is ranked 3rd most expensive for Groceries, 5th for Transport, and 15th for Furniture and Appliances.

Hamilton in Bermuda completes the top 10 moving from 26th in December despite the overall cost of index remaining 108. Hamilton is ranked 4th most expensive for both Education and Healthcare, 10th for Personal Care, 11th for Household expenses (Accommodation including utilities), and 15th for Groceries.

The full overall cost of living ranking list, sourced from Xpatulator.com as at 1 April 2009 is as follows:

Rank and Location
1 Japan, Tokyo

2 China, Hong Kong

3 Nigeria, Lagos

4 Venezuela, Caracas

5 Papua New Guinea, Port Moresby

6 Switzerland, Geneva

7 United Arab Emirates, Dubai

8 Qatar, Doha

9 Denmark, Copenhagen

10 Bermuda, Hamilton

11 Angola, Luanda

12 Switzerland, Zurich

13 Russia, Moscow

14 Solomon Islands, Honiara

15 Cameroon, Douala

16 Chad, N’Djamena

17 Taiwan, Taipei

18 Liechtenstein, Vaduz

19 USA, New York NY

20 New Caledonia, Noumea

21 Greenland, Nuuk

22 Ireland, Dublin

23 United Kingdom, London

24 France, Paris

25 Norway, Oslo

26 Italy, Milan

27 San Marino, San Marino

28 USA, San Francisco Calif

29 Monaco, Monaco

30 Austria, Vienna

31 Bahamas, Nassau

32 Central African Republic, Bangui

33 Nauru, Yaren

34 USA, Boston Mass

35 Finland, Helsinki

36 Italy, Rome

37 Kazakhstan, Almaty

38 Cote D’Ivoire, Abidjan

39 Bahrain, Manama

40 Micronesia, Palikir

41 Isle of Man, Douglas

42 Haiti, Port-au-Prince

43 USA, San Jose Calif

44 Cameroon, Yaounde

45 Djibouti, Djibouti

46 Palau, Melekeok

47 Guinea-Bissau, Bissau

48 Azerbaijan, Baku

49 Benin, Cotonou

50 Slovakia, Bratislava

51 Belgium, Brussels

52 Netherlands, Amsterdam

53 Sao Tome and Principe, Sao Tome

54 Jersey, Saint Helier

55 Mali, Bamako

56 Gabon, Libreville

57 United Arab Emirates, Abu Dhabi

58 Croatia, Zagreb

59 Singapore, Singapore

60 Ghana, Accra

61 Spain, Madrid

62 Ukraine, Kiev

63 USA, Philadelphia Pa

64 Cayman Islands, George Town

65 Sierra Leone, Freetown

66 Germany, Berlin

67 Czech Republic, Prague

68 USA, San Diego Calif

69 Jordan, Amman

70 Trinidad and Tobago, Port-of-Spain

71 USA, Los Angeles Calif

72 USA, Washington DC

73 Estonia, Tallinn

74 USA, Baltimore Md

75 Falkland Islands, Stanley

76 Saudi Arabia, Riyadh

77 Guernsey, St Peter Port

78 Comores, Moroni

79 Sudan, Khartoum

80 Germany, Bonn

81 Vatican City, Vatican City

82 Canada, Toronto

83 Timor-Leste, Dili

84 Hungary, Budapest

85 USA, Seattle Wash

86 Brazil, Brasilia

87 Lebanon, Beirut

88 USA, Miami Fla

89 Vanuatu, Port Vila

90 Luxembourg, Luxembourg

91 Jamaica, Kingston

92 Australia, Sydney

93 Kuwait, Kuwait City

94 Moldova, Chisinau

95 Congo Democratic Rep, Kinshasa

96 Germany, Frankfurt

97 Tuvalu, Funafuti

98 Iceland, Reykjavík

99 Barbados, Bridgetown

100 Portugal, Lisbon

101 Mozambique, Maputo

102 Senegal, Dakar

103 Canada, Vancouver

104 Niger, Niamey

105 China, Beijing

106 Ethiopia, Addis Ababa

107 Turkey, Ankara

108 Togo, Lome

109 Equatorial Guinea, Malabo

110 Martinique, Fort-de-France

111 Armenia, Yerevan

112 USA, Chicago Ill

113 Liberia, Monrovia

114 Gibraltar, Gibraltar

115 Sweden, Stockholm

116 Somalia, Mogadishu

117 USA, Portland Ore

118 Israel, Jerusalem

119 Malta, Velletta

120 Puerto Rico, San Juan

121 Canada, Calgary

122 Rwanda, Kigali

123 Guam, Hagatna

124 Burkina Faso, Ouagadougou

125 Zambia, Lusaka

126 Andorra, Andorra la Vella

127 Cyprus, Nicosia

128 USA, Las Vegas Nev

129 Samoa, Apia

130 Saint Helena, Jamestown

131 Tanzania, Dar es Salaam

132 Greece, Athens

133 Poland, Warsaw

134 Maldives, Male

135 Malawi, Lilongwe

136 Thailand, Bangkok

137 Indonesia, Jakarta

138 USA, Jacksonville Fla

139 Antigua and Barbuda, Saint John’s

140 Gambia, Banjul

141 United Kingdom, Glasgow

142 Lithuania, Vilnius

143 Belarus, Minsk

144 USA, Dallas Tex

145 Australia, Canberra

146 India, Mumbai

147 Australia, Melbourne

148 USA, Denver Colo

149 Algeria, Algiers

150 Georgia Republic of, Tbilisi

151 Honduras, Tegucigalpa

152 USA, Atlanta GA

153 USA, Cleveland Ohio

154 Canada, Montreal

155 USA, Milwaukee Wis

156 Congo, Brazzaville

157 Guinea, Conakry

158 Saint Kitts and Nevis, Basseterre

159 USA, Detroit Mich

160 Panama, Panama City

161 Latvia, Riga

162 Uganda, Kampala

163 Korea Republic of, Seoul

164 USA, Charlotte NC

165 Marshall Islands, Majuro

166 Australia, Perth

167 USA, Phoenix Ariz

168 USA, Columbus Ohio

169 USA, Austin Tex

170 Madagascar, Antananarivo

171 USA, Tampa Fla

172 United Kingdom, Birmingham

173 Afghanistan, Kabul

174 Grenada, Saint George’s

175 Vietnam, Hanoi

176 USA, Indianapolis Ind

177 USA, St Louis MO

178 Saint Vincent and the Grenadines, Kingstown

179 Peru, Lima

180 Syria, Damascus

181 USA, Fort Worth Tex

182 Slovenia, Ljubljana

183 Mauritania, Nouakchott

184 USA, El Paso Tex

185 Philippines, Manila

186 China, Shanghai

187 USA, Memphis Tenn

188 USA, Pittsburgh Penn

189 Belize, Belmopan

190 India, New Delhi

191 Romania, Bucharest

192 Guatemala, Guatemala City

193 Iran, Tehran

194 Cape Verde, Praia

195 India, Chennai

196 USA, Houston Tex

197 Canada, Ottawa

198 Costa Rica, San Jose

199 Dominica, Roseau

200 Nicaragua, Managua

201 Guyana, Georgetown

202 Dominican Republic, Santo Domingo

203 Bulgaria, Sofia

204 237 Suriname, Paramaribo

205 Cuba, Havana

206 Oman, Muscat

207 India, Calcutta

208 Mongolia, Ulaanbaatar

209 Tajikistan, Dushanbe

210 India, Hyderabad

211 Burundi, Bujumbura

212 USA, San Antonio Tex

213 Myanmar, Yangon

214 Uruguay, Montevideo

215 Paraguay, Asuncion

216 Albania, Tirana

217 Brunei, Bandar Seri Begawan

218 Mauritius, Port Louis

219 Fiji, Suva

220 Egypt, Cairo

221 Australia, Brisbane

222 El Salvador, San Salvador

223 Korea Democratic Republic of, Pyongyang

224 Laos, Vientiane

225 Mexico, Mexico City

226 Morocco, Rabat

227 India, Bangalore

228 Saint Lucia, Castries

229 New Zealand, Auckland

230 Kiribati, South Tarawa

231 Kosovo, Pristina

232 Kenya, Nairobi

233 Serbia, Belgrade

234 Bangladesh, Dhaka

235 Pakistan, Lahore

236 Bolivia, La Paz

237 Colombia, Bogota

238 Botswana, Gaberone

239 Sri Lanka, Colombo

240 Pakistan, Islamabad

241 Turkmenistan, Ashgabat

242 Kyrgyzstan, Bishkek

243 Macedonia, Skopje

244 Pakistan, Karachi

245 Australia, Adelaide

246 Montenegro, Podgorica

247 Chile, Santiago

248 Malaysia, Kuala Lumpur

249 China, Macao

250 Eritrea, Asmara

251 Iraq, Baghdad

252 Argentina, Buenos Aires

253 Bosnia and Herzegovina, Sarajevo

254 Uzbekistan, Tashkent

255 Ecuador, Quito

256 Nepal, Kathmandu

257 Tunisia, Tunis

258 Yemen, Sanaa

259 Bhutan, Thimphu

260 South Africa, Johannesburg

261 China, Shenzhen

262 Tonga, Nuku’Alofa

263 China, Dalian

264 South Africa, Pretoria

265 Lesotho, Maseru

266 China, Wuhan

267 Namibia, Windhoek

268 Libya, Tripoli

269 South Africa, Cape Town

270 China, Guangzhou

271 Seychelles, Victoria

272 South Africa, Durban

273 Cambodia, Phnom Penh

274 Swaziland, Mbabane

275 China, Tianjin

276 Zimbabwe, Harare

Steven Coleman runs the most comprehensive global relocation calculator available, an internet service that is used primarily to calculate expatriate salary levels for global assignments, which can be found at http://www.xpatulator.com