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Zurich tops list of most expensive European cities for expatriates

The Swiss city of Zurich is the most expensive location in Europe and ranks 3rd globally according to findings from the latest Cost of Living survey by ECA International, the world's leading provider of knowledge, information and technology for the management and assignment of employees around the world.

To ensure that an employee’s spending power is maintained when they are sent on international assignment, a cost of living allowance is often provided as part of the pay package. This allowance will be affected by differences in inflation levels as well as exchange rate movements between that employee’s home and host country.

- Steven Kilfedder, Manager, Cost of Living and Remuneration Services

The weakening of the Norwegian Krone in response to the weakened oil sector contributed to Oslo’s tumble down the ranking - the most expensive of the European locations surveyed last year, it has since fallen to 11th position globally.

While Central London's 48th position in the global ranking is two spots lower than last year, it's a significant rise from two years ago when it was outside of the top 80 locations ranked. Although, like many currencies, sterling has weakened against the US dollar between annual surveys, it has strengthened against a number of other major currencies in the past two year.

Although prices in Russia have soared since international sanctions were imposed, cities there plummeted down the list of most expensive locations for expatriates. The rouble, also affected by the fall in oil prices, weakened significantly over the twelve months between surveys outweighing price increases. Moscow, in 22nd position a year ago, is 146th in the latest ranking.

The euro’s significant depreciation between surveys has seen all Eurozone locations drop down the ranking with Spanish and German locations among those falling hardest. Madrid has fallen from 86th place to 160th while Munich which ranked 54th last year is in 121st position this survey. Elsewhere, Stockholm and Paris have fallen out of the top 30 to 55th and 75th spots respectively.

ECA carries out two main cost of living surveys per year to help companies calculate cost of living allowances so that their employees' spending power is not compromised while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 440 locations worldwide. Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.

Shanghai moves into top 10 most expensive locations for expatriates

Shanghai has become Asia Pacific’s most expensive location for expatriates for the first time. Globally, the Chinese city has moved into the top ten to 8th position – up from last year’s 18th spot.

“Some may be surprised to see Mainland Chinese cities feature so high up the ranking,” said Lee Quane, Regional Director – Asia, ECA International. “It is of course possible to buy many items cheaply in China. However, when comparing cost of living for the purposes of expatriate packages, as we do, we look at internationally recognised quality brands wherever possible in order to make like-for-like comparisons. Over the past few years the availability in China of these usually more expensive items has increased, pushing up the overall cost of goods in our shopping basket. A strong renminbi has also put upward pressure on costs for many companies sending staff into China.”

A number of factors will impact how cost effectively one nationality will shop in another country. For example, familiarity with local shops and brands, the availability of the brands they buy at home and whether the goods they are used to consuming back home are also popular in the country they are in.

“Our ranking is based on an international spending pattern for comparison purposes. However, a Chinese person buying local products is likely to find the city a lot cheaper and may find other cities to be more expensive for them. In this case they will require an allowance to ensure their spending power is maintained on assignment,” Quane said. 

Depending on company policy, an organisation may choose a more or less generous approach to calculating cost of living allowances for their expatriates. It is important to understand fully all the factors which can influence an index and for HR departments to explain to their mobile talent the thinking behind it.

More worldwide highlights

Tokyo, which topped the Asia Pacific ranking a year ago has dropped from 11th to 16th globally. Recent economic policies including consumption tax increases have seen the price of items in ECA’s shopping basket rise over the 12 months between surveys. Nevertheless, the significant weakening of the yen during the same period has more than offset this making items there cheaper now to buy for many converting from another currency.

Within Asia Pacific, Shanghai is just ahead of Beijing (9th globally) and Seoul (10th).

Hong Kong, Asia Pacific’s 4th most expensive location for expatriates has entered the top 15 leaping up from last year’s 29th position to 12th place. With the US dollar, to which the HK dollar is pegged, having strengthened against a number of currencies over the past year, the SAR has become more expensive for many businesses sending assignees there.

While Singapore has remained steady in the regional ranking, maintaining 9th position, it has risen 12 spots to 19th place globally.

Australian locations continue to fall down the ranking – a reflection of the weakened Australian dollar as growth there slows. Sydney currently ranks 57th globally down from last year’s 38th place.

Manhattan is the most expensive location in North America for expatriates. The strengthening of the US dollar between surveys has seen locations across the United States climb the ranking. Manhattan has risen to 20th place globally up from last year’s 39th spot. Conversely, cities in Canada have dropped in the ranking. Vancouver, the most expensive city in Canada for expatriates has fallen 6 places to 94th globally.

Buenos Aires is the most expensive location in Latin America. The Argentine capital ranks 40th globally – in sharp contrast to last year when it was 134th. Although the peso weakened against major currencies between annual surveys, prices of items in ECA’s shopping increased 25% on average during the same period.

Despite significant price increases Brazilian cities continue to fall down the ranking as the value of the real depreciates even faster. Rio de Janeiro ranked just outside the top 50 just two years ago is now in 162nd spot. Caracas, Venezuela, number one in the global ranking a year ago, has not been included in this ranking due to the multiple exchange rate systems in operation there leading to considerably varied rankings.

In Africa, South Sudan’s capital city Juba has now overtaken Luanda, Angola (2nd globally) in the ranking.

In the Middle East, Tel Aviv is the most expensive location, despite falling 3 spots to 24th place. Elsewhere in the region a number of locations where the currency is pegged to the US dollar have climbed the ranking dramatically including Dubai (85th globally) and Doha (89th).

ENDS

Notes to Editors

  • Figures used in this release were taken from ECA's Cost of Living Survey.
  • Venezuela has not been included in this ranking due to its ongoing volatile economic situation and the multiple exchange rate systems in operation there leading to considerably varied rankings

About ECA's Cost of Living Survey

ECA International's main cost of living surveys are carried out in March and September using a basket of day-to-day goods and services commonly purchased by assignees. The data used above refers to year-on-year movements between ECA's March 2014 and 2015 surveys.

Cost of living indices are 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: Household goods, recreational goods; general services, leisure services

General: Clothing; electrical goods; motoring; meals out, alcohol and tobacco

Certain living costs such as accommodation rental, utilities charges (electricity, gas, water), car purchases 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.

Global and regional rankings

Top 30 most expensive cities worldwide for international assignees
Country Location Global rank 2015 Global rank 2014
South Sudan Juba 1 9
Angola Luanda 2 3
Switzerland Zurich 3 4
Switzerland Geneva 4 5
Switzerland Bern 5 7
Switzerland Basel 6 8
Democratic Republic of the Congo Kinshasa 7 19
China Shanghai 8 18
China Beijing 9 20
Korea Republic Seoul 10 16
Norway Oslo 11 2
Hong Kong Hong Kong 12 29
Norway Stavanger 13 6
China Guangzhou 14 34
Korea Republic Busan 15 35
Japan Tokyo 16 11
Guinea Conakry 17 43
China Shenzhen 18 47
Singapore Singapore 19 31
United States of America Manhattan 20 39
Papua New Guinea Port Moresby 21 57
Denmark Copenhagen 22 10
Korea Republic Ulsan 23 49
Israel Tel Aviv 24 21
Israel Jerusalem 25 25
China Dalian 26 78
Gabon Libreville 27 14
Japan Yokohama 28 24
United States of America New York 29 69
United States of America Honolulu 30 63
Most expensive locations in Europe for international assignees
Regional rank 2015 Location Global rank 2015
1 Zurich 3
2 Geneva 4
3 Bern 5
4 Basel 6
5 Oslo 11
6 Stavanger 13
7 Copenhagen 22
8 Helsinki 34
9 Central London 48
10 Stockholm 55
11 Gothenburg 69
12 Outer London 73
13 Paris 75
14 Edinburgh 79
15 Berlin 87
16 Cardiff 90
17 Glasgow 97
18 Brussels 100
19 Manchester 104
20 Vienna 107
21 Belfast 111
22 Antwerp 118
23 Dublin 119
24 Luxembourg City 120
25 Munich 121
26 Marseille 123
27 Milan 126
28 Strasbourg 128
29 Amsterdam 129
30 Lyon 130
31 Rome 131
32 The Hague 134
33 Toulouse 137
34 Frankfurt 141
35 Stuttgart 142
36 Istanbul 143
37 Hamburg 144
38 Dusseldorf 145
39 Moscow 146
40 Bonn 148
41 Rotterdam 150
42 Athens 156
43 Madrid 160
44 Eindhoven 161
45 Turin 168
46 Barcelona 170
47 Lisbon 179
48 Ljubljana 185
49 Tallinn 188
50 Riga 191
51 Porto 194
52 St Petersburg 202
53 Bratislava 206
54 Zagreb 208
55 Tirana 216
56 Warsaw 221
57 Sofia 224
58 Budapest 225
59 Prague 229
60 Vilnius 233
61 Bucharest 239
62 Sarajevo 240
63 Belgrade 243
64 Skopje 245
65 Minsk 253
66 Chisinau 257
67 Kiev 260
 

About ECA International

Recognised since 1971 as a world authority in its field, ECA is a leader in the provision of knowledge, information and technology to inform, guide and support managers handling compensation and benefits for international workers moving around the world. ECA offers organisations of all sizes an unrivalled portfolio of data, calculation aids, salary management software, reports, guides, surveys and consultancy to help them structure and manage their international rewards programmes for long-term, short-term and permanent moves.

Follow ECA on twitter: @ECAintl

ECA's blog, MoneyMoves, provides updates and commentary on currency, inflation and expatriate cost of living.

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