MERCER’S ANNUAL COST OF LIVING SURVEY FINDS ASIAN, EUROPEAN, AND AFRICAN CITIES MOST EXPENSIVE LOCATIONS FOR EMPLOYEES

June 26, 2018

Unites States, New York


  • Multinationals prepare for the Future of Work with focus on mobile talent
  • New York is the top-ranked city in the United States, Winston-Salem, NC ranks lowest 

As a result of the digital era, aging populations, skills shortages, and unpredictable political and economic contexts, the landscape of global business is changing as are jobs that are critical for the future of work. Multinationals are embracing this transformation by focusing on mobile talent and assessing the cost of expatriate packages for their international assignees. According to Mercer’s 24th annual Cost of Living Survey, factors like instability of housing markets, low inflation, and fluctuating prices for goods and services are impacting the cost of doing business in various cities around the world. 


Mercer’s survey reveals that Hong Kong has passed Luanda to take the top spot as the world’s most expensive city for expatriates. Tokyo and Zurich are in second and third positions, respectively, with Singapore in fourth, up one place from last year. This means that four out of five of the world’s most expensive cities for expatriates are now in Asia. 


“With technology advances and the importance of a globally connected workforce, deploying talent remains a key component of a multinational’s business strategy,” said Ilya Bonic, President of Mercer’s Career business. “While a mobile workforce allows organizations to achieve greater efficiency, utilize top talent, and be cost effective with international projects, volatile markets and slowing economic growth in many parts of the world require them to carefully assess expatriate remuneration packages.” 


Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (5), Luanda (6), Shanghai (7), N’Djamena (8), Beijing (9), and Bern (10). The world’s least expensive cities for expatriates are Tashkent (209), Tunis (208), and Bishkek (207). 


“Aligning workforce and mobility strategies by ensuring the right employees are in the right place is more critical than ever for multinationals as they focus on new global business models,” said Mr. Bonic. “And, properly compensating employees on international assignments is as important as it can be costly.” 


Mercer's widely recognized survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar. The survey includes over 375 cities throughout the world; this year’s ranking 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. 


The Americas


Cities in the United States have dropped in the ranking due to the depreciation of the US dollar against other major currencies worldwide. New York dropped four places to rank 13, the highest-ranked city in the region. San Francisco (28) and Los Angeles (35) dropped seven and twelve places, respectively, from last year while Chicago (51) dropped twenty places. Among other major US cities, Washington, DC (56) is down seventeen places, Miami (60) is down nineteen places, and Boston (70) is down nineteen spots. Portland (130) and Winston Salem, North Carolina (161) remain the least expensive US cities surveyed for expatriates. 


Steve Nurney, Partner at Mercer said, “Steady pickup of the European economy triggered an important decline of the US dollar against the majority of currencies worldwide.”   


In South America, São Paolo (58) ranked as the costliest city despite a thirty-two place drop from last year. Santiago (69) followed as the second most expensive location. The majority of other cities in South America fell in the ranking despite price increases on goods and services in countries such as Brazil, Argentina, and Uruguay. In particular, Rio de Janeiro (99) plummeted forty-three spots. Lima (132) dropped twenty-eight places, while Bogota (168) fell fifteen places. Tegucigalpa (201) is the least expensive city in South America. Caracas in Venezuela has been excluded from the ranking due to the complex currency situation; its ranking would have varied greatly depending on the official exchange rate selected. 


Although most Canadian cities dropped in the ranking, the country’s highest-ranked city, Toronto (109), jumped ten places due to an increase in expatriate rental accommodation costs. Vancouver (109) dropped two spots, while Montreal (147) and Calgary (154) fell eighteen and eleven spots, respectively. 


Europe, the Middle East, and Africa


Two European cities are among the top 10 list of most expensive cities. At number three in the global ranking, Zurich remains the most costly European city, followed by Bern (10). Geneva (11) is down four places from last year mainly due to a downward trend in the city’s housing market.


Overall, Western European cities have all risen in the rankings, a result of strong local currencies against the US dollar and the cost of goods and services. In particular, cities in Germany experienced some of this year’s biggest surges in the ranking, with Frankfurt (68) and Berlin (71) jumping forty-nine spots while Munich (57) climbed forty-one places. In the United Kingdom, Birmingham (128) went up nineteen places from last year, Belfast (152) jumped eighteen spots, and Aberdeen (134) climbed twelve places from its previous ranking. London jumped ten spots to rank 19. 


Other cities that jumped in the ranking include Paris (34), up twenty-eight places from last year, Rome (46), up thirty-four spots, Madrid (64), up forty-seven, and Vienna (39) up thirty-nine spots. Meanwhile, a few cities in Eastern and Central Europe, including Moscow (17), St. Petersburg (49), and Kiev (173), dropped four, fourteen, and ten spots, respectively, because of local currencies losing value against the US dollar. 


Tel Aviv (16) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (26), Abu Dhabi (40), and Riyadh (45). Cairo (188) remains the least expensive city in the region. “On the whole, most Middle Eastern cities have dropped in the ranking, due to decreases in rental accommodation costs throughout the region,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer. 


Despite dropping off the top spot on the global list, Luanda, Angola (6) remains the highest-ranking city in Africa. N’Djamena (8) follows, rising seven places. Moving up fourteen spots, Libreville (18) is the next African city on the list, followed by Brazzaville, Congo (19), which is up eleven places. Rising ten spots, Tashkent (209) in Uzbekistan ranks as the least expensive city in the region and globally. 


Asia Pacific


This year, Hong Kong (1) emerged as the most expensive city for expatriates both in Asia and globally as a consequence of Luanda’s drop in the ranking due in part to the downward trend in the city’s housing market.  Hong Kong is followed by Tokyo (2), Singapore (4), Seoul (5), Shanghai (7), and Beijing (9). 


“Stronger Chinese monetary regulation, a flourishing economy and a push to have the Chinese Yuan as an international currency pushed Chinese cities up in the ranking,” said Ms. Traber. “However, significant surges in other locations worldwide caused Japanese cities, Osaka and Nagoya in particular, to fall in this year’s ranking.” 


Mumbai (55) is India’s most expensive city, followed by New Delhi (103) and Chennai (144). Kolkata (182) and Bengaluru (170) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (52) jumped fifteen places from last year. Kuala Lumpur (145) also rose in the ranking, up twenty places, while Hanoi (137) plummeted thirty-seven places. Bishkek (207) and Tashkent (209) remain the region’s least expensive cities for expatriates. 


Australian cities have fallen in the ranking this year. Brisbane (84) and Perth (61) dropped thirteen and eleven spots, respectively, while Sydney (29), Australia’s most expensive ranked city for expatriates, experienced a relatively moderate drop of five places. Melbourne fell twelve spots to rank 58. “Cities in other countries moved up in the ranking, causing Australian cities to drop,” said Ms. Traber. “In general, cities that fall in the middle of the ranking are at greater risk of experiencing significant changes in their positions due to the movement of other cities.” 


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 https://mobilityexchange.mercer.com/cost-of-living-rankings or call Mercer Client Services in Warsaw on +48 22 434 5383. 


Notes for editors


The list of rankings is provided to journalists for reference and should not be published in full. The top 10 and bottom 10 cities may be reproduced in a table. 


The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2018. Exchange rates from that time and Mercer’s international basket of goods and services from its Cost of Living survey have been used as base measurements. 


Governments and major companies use data from this survey to protect the purchasing power of their employees when transferred abroad; rental accommodation costs data is used to assess local expatriate housing allowances. The choice of cities surveyed is based on the demand for data. 


About Mercer


Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 22,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With nearly 65,000 colleagues and annual revenue over $14 billion, through its market-leading companies including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer


Mercer also provides advice and market data on international and expatriate compensation management, and works with multinational companies and governments worldwide. It maintains one of the most comprehensive databases on international assignment policies; compensation practices; and data on worldwide cost of living, housing, and hardship allowances. Its annual global mobility conferences and other events provide companies with the latest trends and research on mobility issues. Visit https://mobilityexchange.mercer.com/ for details. Follow Mercer’s mobility news on Twitter @Mercer. 


Mercer Cost of Living Survey – Worldwide Rankings 2018


(The Mercer international basket, including rental accommodation costs)


Rank as of March


City


Country/Market


2017


2018


2


1


HONG KONG


HKSAR


3


2


TOKYO


Japan


4


3


ZURICH


Switzerland


5


4


SINGAPORE


Singapore


6


5


SEOUL


South Korea


1


6


LUANDA


Angola


8


7


SHANGHAI


China


15


8


NDJAMENA


Chad


11


9


BEIJING


China


10


10


BERN


Switzerland


7


11


GENEVA


Switzerland


12


12


SHENZHEN


China


9


13


NEW YORK CITY


United States


27


14


COPENHAGEN


Denmark


18


15


GUANGZHOU


China


16


16


TEL AVIV


Israel


13


17


MOSCOW


Russia


32


18


LIBREVILLE


Gabon


30


19


BRAZZAVILLE


Congo


29


19


LONDON


United Kingdom


13


21


VICTORIA


Seychelles


42


22


NOUMEA


New Caledonia


20


23


OSAKA


Japan


42


24


ABIDJAN


Côte d'Ivoire


32


25


NANJING


China


19


26


DUBAI


United Arab Emirates


24


27


TAIPEI


Taiwan


21


28


SAN FRANCISCO


United States


24


29


SYDNEY


Australia


37


29


TIANJIN


China


46


31


CHENGDU


China


66


32


DUBLIN


Ireland


71


33


MILAN


Italy


62


34


PARIS


France


23


35


LOS ANGELES


United States


45


36


QINGDAO


China


17


37


KINSHASA


Dem. Rep. of the Congo


42


38


SHENYANG


China


78


39


VIENNA


Austria


22


40


ABU DHABI


United Arab Emirates


34


41


NAGOYA


Japan


28


42


LAGOS


Nigeria


57


43


ASHGABAT


Turkmenistan


70


43


YAOUNDE


Cameroon


52


45


RIYADH


Saudi Arabia


80


46


ROME


Italy


46


47


OSLO


Norway


84


48


BANGUI


Central African Republic


35


49


ST. PETERSBURG


Russia


85


50


AMSTERDAM


Netherlands


31


51


CHICAGO


United States


67


52


BANGKOK


Thailand


88


53


HELSINKI


Finland


35


54


HONOLULU


United States


57


55


MUMBAI


India


39


56


WASHINGTON


United States


98


57


MUNICH


Germany


46


58


MELBOURNE


Australia


26


58


SAO PAULO


Brazil


41


60


MIAMI


United States


50


61


PERTH


Australia


93


62


DAKAR


Senegal


54


63


ACCRA


Ghana


111


64


MADRID


Spain


52


65


BEIRUT


Lebanon


37


66


DHAKA


Bangladesh


104


67


BRUSSELS


Belgium


117


68


FRANKFURT


Germany


67


69


SANTIAGO


Chile


51


70


BOSTON


United States


120


71


BERLIN


Germany


107


71


LUXEMBOURG


Luxembourg


49


73


DJIBOUTI


Djibouti


94


73


DOUALA


Cameroon


65


75


MONTEVIDEO


Uruguay


40


76


BUENOS AIRES


Argentina


71


77


CANBERRA


Australia


55


77


MANAMA


Bahrain


121


79


BARCELONA


Spain


64


79


WHITE PLAINS


United States


61


81


AUCKLAND


New Zealand


122


82


DUSSELDORF


Germany


132


83


PRAGUE


Czech Republic


71


84


BRISBANE


Australia


62


85


DALLAS


United States


74


86


HOUSTON


United States


77


87


ADELAIDE


Australia


125


88


HAMBURG


Germany


106


89


STOCKHOLM


Sweden


76


90


SEATTLE


United States


67


91


YANGON


Myanmar


126


92


RIGA


Latvia


137


93


LISBON


Portugal


59


94


AMMAN


Jordan


83


95


ATLANTA


United States


79


95


SAN JUAN


Puerto Rico


81


97


MORRISTOWN


United States


75


97


PORT OF SPAIN


Trinidad & Tobago


59


99


ABUJA


Nigeria


56


99


RIO DE JANEIRO


Brazil


86


101


WELLINGTON


New Zealand


86


102


MINNEAPOLIS


United States


99


103


NEW DELHI


India


130


104


POINTE A PITRE


Guadeloupe


137


105


LYON


France


100


106


BANDAR SERI BEGAWAN


Brunei


91


106


CONAKRY


Guinea


141


108


STUTTGART


Germany


119


109


TORONTO


Canada


107


109


VANCOUVER


Canada


139


111


COTONOU


Benin


144


112


ATHENS


Greece


147


113


BRATISLAVA


Slovakia


88


114


PANAMA CITY


Panama


81


115


DOHA


Qatar


95


116


DETROIT


United States


88


117


JAKARTA


Indonesia


117


117


JEDDAH


Saudi Arabia


92


117


MUSCAT


Oman


126


120


BAMAKO


Mali


111


121


KUWAIT CITY


Kuwait


100


122


ST. LOUIS


United States


111


123


NAIROBI


Kenya


97


124


HO CHI MINH CITY


Vietnam


100


125


CLEVELAND


United States


107


125


PITTSBURGH


United States


134


125


PORT AU PRINCE


Haiti


147


128


BIRMINGHAM


United Kingdom


130


128


CASABLANCA


Morocco


111


130


GUATEMALA CITY


Guatemala


115


130


PORTLAND


United States


104


132


LIMA


Peru


161


132


LJUBLJANA


Slovenia


146


134


ABERDEEN


United Kingdom


144


134


LOME


Togo


153


134


OUAGADOUGOU


Burkina Faso


100


137


HANOI


Vietnam


95


138


MANILA


Philippines


159


138


ZAGREB


Croatia


160


140


TALLINN


Estonia


110


141


SAN JOSE


Costa Rica


115


142


PHNOM PENH


Cambodia


158


143


NIAMEY


Niger


135


144


CHENNAI


India


165


145


KUALA LUMPUR


Malaysia


168


145


NURNBERG


Germany


129


147


MONTREAL


Canada


161


148


GLASGOW


United Kingdom


167


148


VILNIUS


Lithuania


172


150


LEIPZIG


Germany


176


151


BUDAPEST


Hungary


170


152


BELFAST


United Kingdom


173


153


LIMASSOL


Cyprus


143


154


CALGARY


Canada


180


154


WARSAW


Poland


123


156


QUITO


Ecuador


177


157


MEXICO CITY


Mexico


126


158


BRASILIA


Brazil


132


158


COLOMBO


Sri Lanka


152


160


OTTAWA


Canada


171


161


PORT LOUIS


Mauritius


140


161


WINSTON SALEM


United States


142


163


ISTANBUL


Turkey


155


164


KINGSTON


Jamaica


156


165


HARARE


Zimbabwe


151


165


HAVANA


Cuba


169


165


RABAT


Morocco


153


168


BOGOTA


Colombia


147


169


KIGALI


Rwanda


166


170


BENGALURU


India


199


170


CAPE TOWN


South Africa


189


172


TIRANA


Albania


163


173


KIEV


Ukraine


156


174


SAN SALVADOR


El Salvador


184


175


SOFIA


Bulgaria


181


176


BUCHAREST


Romania


191


177


JOHANNESBURG


South Africa


150


178


SANTO DOMINGO


Dominican Republic


188


179


MAPUTO


Mozambique


164


180


DAR ES SALAAM


Tanzania


198


181


BELGRADE


Serbia


184


182


KOLKATA


India


136


183


ADDIS ABABA


Ethiopia


178


183


ASUNCION


Paraguay


179


185


LUSAKA


Zambia


182


186


BAKU


Azerbaijan


175


187


ALMATY


Kazakhstan


183


188


CAIRO


Egypt


196


189


GABORONE


Botswana


173


190


ISLAMABAD


Pakistan


202


191


SARAJEVO


Bosnia and Herzegovina


186


192


KAMPALA


Uganda


203


193


MONTERREY


Mexico


189


194


NOUAKCHOTT


Mauritania


187


195


ALGIERS


Algeria


206


196


WINDHOEK


Namibia


206


197


SKOPJE


Macedonia


195


198


YEREVAN


Armenia


193


199


LA PAZ


Bolivia


194


200


MANAGUA


Nicaragua


197


201


TEGUCIGALPA


Honduras


200


202


MINSK


Belarus


204


203


TBILISI


Georgia


205


204


BLANTYRE


Malawi


201


205


KARACHI


Pakistan


192


206


BANJUL


Gambia


208


207


BISHKEK


Kyrgyzstan


209


208


TUNIS


Tunisia


123


209


TASHKENT


Uzbekistan


Source: Mercer’s 2018 Cost of Living Survey


CONTACT INFORMATION