DUBAI, June 29, (Agencies): The new Cost of Living Survey from leading global HR consulting firm Mercer has revealed today the rankings of a majority of the GCC cities.
Abu Dhabi (ranked 50) and Dubai (55) rank highest in the GCC, followed by Manama, Bahrain (139), Riyadh, KSA (144), Doha, Qatar (146), Kuwait City, Kuwait (152), Muscat, Oman (176), and Jeddah, KSA (181).
The Mercer Cost of Living Survey data is the most comprehensive in the world and is used by firms and governments to help determine remuneration for expats being relocated to cities across the globe.
Dr Markus Wiesner, who heads the Dubai office, says Mercer increased the number of cities surveyed this year from 143 to 214 which means that cities cannot be compared against previous rankings.
“While the cost of living has remained relatively stable across the GCC, we are seeing that accommodation costs have continued to decrease in Abu Dhabi and Dubai, driving down the cost of living for expats. In contrast, we noted in places like Jeddah increased demand for expat accommodation has pushed costs up.”
Luanda in Angola is the world’s most expensive city for expatriates while Tokyo is in second position, with Ndjamena in Chad in third place. Moscow is in fourth position followed by Geneva in fifth while Karachi is ranked as the world’s least expensive city. The survey found that Luanda is three times as costly as Karachi.
The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees. All cities are compared against New York as the base city for the index. Currency movements are measured against the US dollar. The cost of housing - often the biggest expense for expats - plays an important part in determining where cities are ranked.
For the first time, the ranking of the world’s top 10 most expensive cities includes three African urban centres: Luanda (1) in Angola, Ndjamena (3) in Chad and Libreville (7) in Gabon. The top ten also includes three Asian cities; Tokyo (2), Osaka (6) and Hong Kong (jointly ranked 8). Moscow (4), Geneva (5) and Zurich (joint 8) are the most expensive European cities, followed by Copenhagen (10).
Wiesner added: “In the past couple of years, corporate assignments have become truly global, with expatriates and ‘global assignees’ being transferred across all parts of the world. However, global mobility is still an expensive undertaking for companies, so selection of the right candidates and a real understanding of the costs involved in relocating staff to other countries are essential - especially in today’s economic environment.”
“Our cities are selected based on requests from our multinational clients,” he continued, “Notably African cities now figure prominently reflecting the growing economic importance of the region to global companies across all business sectors.”
The survey, which covers 214 cities across five continents and measures the comparative costs of more than 200 items in each location, said developing cities were actually more expensive for expats to live in than Western cities such as New York or Washington DC, usually viewed as being pricey.
“Many people assume that cities in the developing world are cheap but this isn’t necessarily true for expatriates working there,” Mercer senior researcher Nathalie Constantin-Metral said in a statement.
“In some African cities, the cost of this can be extraordinarily high — particularly the cost of good, secure accommodation,” she said.
“We’ve seen demand increase for information on African cities from across the business spectrum — mining, financial services, airlines, manufacturers, utilities and energy companies.”
The ranking is based on the comparative cost of over 200 items in each location including housing, transport, food, clothing, household goods and entertainment. New York is used as the base city for the index and currency movements are measured against the US dollar.
Based on these criteria, three African cities — Luanda, Ndjamena and Libreville in Gabon at seven — were among the 10 priciest cities for the first time, reflecting the increasing economic importance of this region across all business sectors.
Asia’s cities are also among the world’s most expensive for expat postings: apart from Tokyo which is ranked second, Osaka comes in at 6 and Hong Kong is tied with Zurich at 8.
Highlighting the commercial importance to multinationals of locations other than just Beijing, Shanghai and Hong Kong, seven Chinese cities appeared in the 2010 rankings.
Based on these criteria, Oslo at 11, Milan at 15, and London and Paris, both at 17, were the most expensive cities in Europe while the least expensive city in Europe was Tirana in Albania.
Living in the Middle East isn’t cheap either: Tel Aviv (19) was the most expensive city in the Middle East, followed by Abu Dhabi (50) and Dubai (55). Tripoli (186) in Libya was the least expensive Middle Eastern location.
“Accommodation costs have continued to decrease in Abu Dhabi and Dubai, driving down the cost of living for expats,” Constantin-Metral said.
Brazil’s commercial capital Sao Paulo (21) was the most expensive city in all of the Americas, a result of the strengthening of the currency against the dollar.
In the United States, New York (27) was the most expensive city, followed by Los Angeles (55). Washington, DC, was ranked 111 and the least expensive US city was Winston-Salem in North Carolina (197).
“The weakening of the US dollar against a number of other currencies, combined with a decrease in the cost of rental accommodation, has pulled US cities down the rankings,” Constantin-Metral said.
And the world’s least expensive city of expats? The Mercer survey said it was Karachi in Pakistan.
Singapore is not far behind in 11th, followed by Beijing in 16th, Nagoya in Japan in 19th, Shanghai in 25th and Taipei in 78th — while in India, Delhi is the most expensive on 85, followed by Mumbai on 89 and Bangalore on 190.
In Australia, Sydney is in 24th spot followed by Melbourne on 33 and Brisbane on 55, while Adelaide is the cheapest on 90th. New Zealand has Auckland on 149th, while Wellington is the cheapest in 163rd spot.
“At the end of 2009 and the beginning of 2010, residential property prices in many Asian countries rose as the economic environment began to stabilise and demand for good expat housing increased,” said Constantin-Metral.
“The strengthening of the Australian and New Zealand dollar against the US dollar also made Australian and New Zealand cities more costly for expatriates coming from the US,” she added.
Moscow is the most expensive European city in 4th spot, ahead of Geneva in 5th, Zurich in 8th and Copenhagen in 10th, according to the rankings based on a survey conducted in March this year. London is joint 17th with Paris.
The study covers 214 cities across five continents, comparing costs of 200 items including housing, transport, food, clothing, household goods and entertainment.