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Sydney rockets up the list of the world’s most expensive cities

08 Jun 2011


  • Sydney rises from 29th to 16th most expensive city
  • All major Australian cities rise up the ranking into the top 30
  • Tokyo, Japan remains most expensive location globally

Sydney is now among the top 20 most expensive cities worldwide according to ECA International, the world’s leader in the development and provision of solutions for the management and assignment of employees around the world.
 
Food price increases of 5.2% in Sydney coupled with the impact of the strong Australian dollar have seen the city shoot up ECA’s ranking looking at cost of living around the world for international assignees. Sydney is now more expensive for international assignees than Paris, Manhattan and Hong Kong as well as London.  A year ago, goods and services in Sydney were 3% more expensive than when purchased in Hong Kong. Now they are 17% more costly.
 
"The strong Australian dollar which hit parity with the US dollar last November, and has strengthened further since, has been a significant factor behind the continued rise of Australian locations up the global ranking," said Anna Michielsen, General Manager, Australia, New Zealand & Pacific for ECA International.
 
"While price increases have impacted on the purchasing power of Australians at home, international assignees coming into the country have seen their purchasing power affected by the stronger Australian dollar.   For businesses, the progressively stronger dollar means that companies sending people to Australia from many locations will need to continue to pay or even increase allowances in order for employees to maintain their purchasing power while on assignment.  Conversely, many locations previously considered expensive for international assignees moving overseas from Australia now seem surprisingly reasonable in terms of cost of living."
 
Sydney has overtaken Canberra, which has jumped from 26th to 18th position year-on-year, as the most expensive Australian city.  Sydney and Canberra are followed by Brisbane (21st), Melbourne (25th), Perth (26th) and Adelaide (28th) - all these major Australian cities are now in the global top 30.
 
Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out a Cost of Living Survey twice a year comparing a basket of consumer goods and services commonly purchased by assignees in 400 locations worldwide.
 
Asia Pacific Regional overview – price inflation vs. currency movements
Price inflation is being witnessed around the world as the cost of food, oil and other commodities rise. In Asia Pacific, the prices of ECA’s basket of goods and services in local currencies have increased by around 4.8% on average. Prices have increased on average by 2.7% overall in Australia. Papua New Guinea (9.7%), Bangladesh (7%), Vietnam (6.2%), Indonesia (5.8%) and Hong Kong (5.5%) are among the Asia Pacific economies that have seen the highest rates of price inflation.
 
However, currency movements still have the biggest influence on rankings.  In Asia Pacific the Australian dollar appreciated most over the twelve months between surveys, followed by the New Zealand dollar.
 
In some cases, the combination of both strong currencies and inflation have contributed to a country’s rise up the ranking.  As well as Sydney this is happening in Singapore, Ulaan Baatar, Bangkok and Kuala Lumpur – these locations have risen by 32, 23, 20 and 16 places respectively.  Other locations have fallen in the ranking despite major increases in local prices. Hong Kong and Vietnam are examples of this – the weakening of their currencies has more than counterbalanced the impact of price inflation.
 
Tokyo remains the most expensive location in Asia Pacific – and globally – for international assignees. Although Japan is the only Asian country surveyed where the actual cost of goods in the ECA basket of goods has fallen, a strong currency and already higher costs for goods mean that cost of living for assignees is significantly more expensive than in other locations in the top ten.
 
Little change has been seen in China but Hong Kong’s drop in the ranking from  33rd to 45th means it is currently only marginally more expensive for international assignees than Beijing, ranked 46th and Shanghai in 47th position. Xi’an is the cheapest mainland Chinese city featured in the survey, ranked 126 places behind Beijing in 172nd.
 
Hanoi is the Asian location that has fallen most in the ranking from 200 to 224 while Karachi (at 240) remains the cheapest location in Asia and globally.
 

Europe

The Norwegian capital Oslo remains the most expensive location surveyed in Europe and the 2nd most expensive globally. It is followed by Stavanger (4th globally) and the Swiss city Zurich (6th).
 
Of the European locations surveyed cost of living has increased the most in Swiss locations. In Switzerland, where inflation is low, it is the strong Swiss franc that has contributed to pushing Zurich up to 6th position globally from 10th.
 
With the weakening of the euro against major currencies between surveys, many eurozone locations have fallen down the ranking significantly. A year ago goods and services commonly purchased by expatriates were almost 9% more expensive in Paris than in Sydney. Now the same items are 5% more expensive when bought in Sydney than in the French capital largely due to the euro depreciating against the Australian dollar.
 
"On-going economic troubles in the eurozone region have affected the single currency," says Anna Michielsen. "As a result many locations where the Euro is used have dropped down the rankings. This continues the trend we have seen in recent surveys, whereby more and more companies are introducing or increasing cost of living allowances when assigning staff from Europe to Asia Pacific."
 

Americas

Caracas (15th) is the most expensive location in the region for international assignees - a result of rampant inflation. The Venezuelan capital is followed by Brazilian locations Rio de Janeiro (23rd) and Sao Paolo (27th).
 
In North America, Vancouver (37th) is the most expensive location for assignees, followed by Ottawa (40th), Toronto (42nd) and Manhattan (44th).
 

Africa and Middle East

Luanda, Angola, ranked 7th globally, is the most expensive location for international assignees in Africa followed by Libreville (Gabon, 19th) and Kinshasa (Democratic Republic of Congo, 24th). While these locations are among some of the most expensive surveyed, Africa is also home to some of the least expensive locations, with Maseru (Lesotho), Alexandria (Egypt) and Durban (South Africa) ranked 237th, 235th and 225th respectively.
 
In the Middle East, Tel Aviv, ranked 29th globally is the most expensive location surveyed while Dubai is 175th. Jeddah, 234th is the least expensive.
 
 
Notes to Editors
Figures used in this release were taken from ECA’s Cost of Living Survey.
 

About ECA’s Cost of Living Survey

ECA International’s cost of living indices are calculated based upon surveys carried out annually in March and September using a basket of day-to-day goods and services.  The data used above refers to year on year movements between ECA’s March 2011 and 2010 surveys.
 
The data is used by ECA clients to calculate cost of living allowances for assignees. The survey covers:
Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
Basic: Drink and tobacco; miscellaneous goods; services
General: Clothing; electrical goods; motoring; meals out
 
Certain living costs such as accommodation, utilities (electricity, gas, water costs), car purchase and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.
 
This comparison of cost of living was calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons, and different levels of shopping efficiency.
 

About ECA International

ECA is the world’s leader in the development and provision of solutions for the management and assignment of employees around the world. Delivering data, expertise, systems and support in formats which suit its clients, ECA’s offer includes a complete 'out-source' package of calculations, advice and services for companies with little international assignment management experience or resource; subscriptions to comprehensive online information and software systems for companies with larger requirements; and custom policy and system development projects for companies who manage thousands of international assignees around the world.
 

Top 50 most expensive cities worldwide

2011 rank

Location

Country

2010 rank

1
Tokyo
Japan
1
2
Oslo
Norway
2
3
Nagoya
Japan
4
4
Stavanger
Norway
6
5
Yokohama
Japan
5
6
Zurich
Switzerland
10
7
Luanda
Angola
3
8
Geneva
Switzerland
9
9
Kobe
Japan
7
10
Bern
Switzerland
11
11
Basel
Switzerland
12
12
Copenhagen
Denmark
8
13
Helsinki
Finland
14
14
Moscow
Russia
15
15
Caracas
Venezuela
91
16
Sydney
Australia
29
17
Stockholm
Sweden
20
18
Canberra
Australia
26
19
Libreville
Gabon
13
20
Paris
France
16
21
Brisbane
Australia
39
22
Seoul
Korea Republic
19
23
Rio de Janeiro
Brazil
27
24
Kinshasa
Democratic Republic of the Congo
22
25
Melbourne
Australia
36
26
Perth
Australia
42
27
Sao Paulo
Brazil
52
28
Adelaide
Australia
45
29
Tel Aviv
Israel
18
30
Gothenburg
Sweden
32
31
Abuja
Nigeria
17
32
Brasilia
Brazil
54
33
Jerusalem
Israel
21
34
Vienna
Austria
23
35
Berlin
Germany
25
36
Singapore
Singapore
68
37
Vancouver
Canada
61
38
St Petersburg
Russia
59
39
Brussels
Belgium
24
40
Ottawa
Canada
66
41
Dakar
Senegal
58
42
Toronto
Canada
70
43
Rome
Italy
38
44
Manhattan NY
United States of America
28
45
Hong Kong
Hong Kong
33
46
Beijing
China
55
47
Shanghai
China
46
48
Strasbourg
France
31
49
Baku
Azerbaijan
30
50
Montreal
Canada
73

 

See also