Kuala Lumpur is 138th-most expensive city

For the first time in Mercer's annual Cost of Living Survey, the ranking of the world's top 10 most expensive cities includes three Asian cities: Tokyo (No 2), Osaka (6) and Hong Kong (8). According to the survey, other highly ranked Asian cities are Hong Kong (8), Singapore (11), Seoul (14), Beijing (16), Nagoya, Japan (19), Shanghai (25) and Taipei (78). A total of seven Chinese cities appeared on the 2010 rankings, highlighting the increased commercial importance to multinationals of locations other than just Beijing Shanghai and Hong Kong.

New Delhi (85) is India’s most expensive city, Jakarta ranks 94, followed by Vietnam’s Hanoi, Thailand’s Bangkok (both at 121) and Kuala Lumpur (138). Pakistan’s Islamabad (212) and Karachi (214) are the region’s two least-expensive cities.

Sydney (24) is Australia’s most expensive city followed by Melbourne (33) and Brisbane (55) while Adelaide (90) is the country’s least expensive city. Auckland (149) is the most expensive city in New Zealand while Wellington (163) is the cheapest. The Australian and the New Zealand dollars have strongly strengthened against the US dollar, which has moved the cities up in the ranking, said Mercer in a statement.

“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,” commented Nathalie Constantin-Metral, a senior researcher at Mercer responsible for compiling the ranking each year. “The strengthening of the Australian and New Zealand dollars against the US dollar also made Australian and New Zealand cities more costly for expatriates coming from the US.”

Overall, Luanda in Angola is the world's most expensive city for expatriates, according to the survey while Karachi is ranked as the world's least expensive city. The top ten also includes three African urban centres: Luanda in Angola (1), Ndjamena in Chad (3) and Libreville in Gabon (7). Moscow (4), Geneva (5) and Zurich (joint 8) are the most expensive European cities, followed by Copenhagen (10). London and Paris rank 17.

According to Constantin-Métral, "Our cities are selected based on requests from our multinational clients. Notably, African cities now figure prominently, reflecting the growing economic importance of the region to global companies across all business sectors."

“Many people assume that cities in the developing world are cheap but this isn’t necessarily true for expatriates working there. To entice talented staff to these cities, multinationals need to provide the same standard of living and benefits that these employees and their families would experience at home. In some African cities, the cost of this can be extraordinarily high -- particularly the cost of good, secure accommodation,” she added.

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. New York is used as the base city for the index and all cities are compared against this location. 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.

Cities in Brazil are amongst the most expensive locations in the Americas with Sao Paulo (21) ranked as the most expensive city in both North and South America, as a result of the strengthening of the Brazilian real against the US dollar. In the US, New York (27) is the most expensive city followed by Los Angeles (55). Washington ranks 111. The least expensive City in the US is Winston-Salem (197). Vancouver (75) is the most expensive Canadian city followed by Toronto (76) and Montreal (98). Ottawa (136) is Canada’s least-expensive city


Written by Tan Su-Yin