2018 Cost of Living Survey

2018 Cost of Living Survey

Newsroom

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

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