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Zurich tops the European rankings of most expensive cities for expatriates

  • Strength of Swiss franc contributes to Switzerland becoming the most expensive European country surveyed for expatriates – Four Swiss cities top European rankings
  • UK cities dramatically fall in global rankings - London drops 17 places
  • Congolese franc’s appreciation against most major currencies over the past year helps Kinshasa to top our global rankings in 2016

The Swiss city of Zurich is the most expensive location in Europe and moves up to 2nd in the global rankings. This was one of the findings of the latest Cost of Living survey published by ECA International, the world's leading provider of knowledge, information and software 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 the employee’s home and host country.

This is the second year in a row that Zurich has topped the European rankings. It has also overtaken Luanda to occupy 2nd position globally.

The relative strength of the franc has contributed to Switzerland becoming the most expensive country surveyed in Europe. Despite prices falling in the previous year, Swiss cities have moved to the top of the rankings. The cities that were ranked higher in the March 2015 survey, Juba and Luanda, have fallen in the rankings despite rapidly increasing prices because the relative weakness of their currencies have made them cheaper for international assignees.

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

ECA International has been conducting research into cost of living for more than 40 years. It carries out two main 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 450 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.

European highlights -

Brexit uncertainty pushes UK cities down the global rankings due to weakening pound

Central London has fallen out of the top 50 most expensive cities in the world to 65th position, down 17 spots from last year. “Uncertainty due to the UK referendum on EU membership, ‘Brexit’, has led to a reluctance from foreign investors to hold UK assets which has pushed down the value of the pound,” said Kilfedder. “The weakened pound means that UK businesses are paying more when sending staff to work overseas but it is cheaper to bring staff to the UK”.

All other ranked locations in the UK have tumbled down the global rankings with Edinburgh falling to 102nd place, down from 79th last year. Cardiff is now ranked at 123rd place and Belfast has dropped 32 positions to 143rd in 2016.

The weakening of the Norwegian krone in response to the declining oil sector contributed to Oslo’s continued tumble down the rankings – Oslo was the world’s most expensive location for expatriates surveyed in 2013, it has since fallen to 20th position globally.

The euro’s appreciation between surveys has seen the majority of Eurozone locations rise in the global rankings with Dutch, Belgian and Swedish locations among those rising most. Amsterdam has risen from 129th place to 117th while Brussels moves further into the global top 100 to 86th place, up 14 places from last year. Stockholm has also risen by 10 places this year to 45th place.

Although prices in Russia have soared since international sanctions were imposed, cities there plummeted down the list of the 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 12th position five years ago, is now 181st in the latest global rankings. Moscow has experienced the third most significant fall in the European rankings in the March 2016 survey. The most prominent rise in the global rankings within Europe was seen in Prague, up 24 places from last year to 205th position in 2016.

Asia highlights -

Japanese locations all move back into the global top 15 most expensive cities

Tokyo is once again the most expensive location in Asia, rising from 7th place in the regional rankings last year. All four of the ranked locations in Japan rose in the regional and global rankings. Within Japan, Tokyo (7th globally) is just ahead of Yokohama (12th), Nagoya (13th) and Osaka (14th).

"The appreciation of the yen in recent months against other major currencies is a significant reason for this rise in the rankings,” said Lee Quane, Regional Director – Asia, ECA International. “This means that for many companies, the cost of maintaining their assignees' purchasing power while posted there has increased.”

Hong Kong is now the 2nd most expensive location for expatriates in the Asia Pacific region. From a global perspective, it has moved into the top ten to 9th position – up from 12th place this time last year. During the past 12 months the Hong Kong dollar appreciated against most currencies contributing to Hong Kong’s rise in the rankings.

Shanghai, which was ranked as the most expensive location for expatriates in the Asia Pacific region a year ago, has moved down two places to the 3rd most expensive. Within China, Shanghai (10th globally) is just ahead of Beijing (11th), Guangzhou (15th) and Shenzhen (24th). 11 of the 14 Chinese cities included in our rankings dropped positions in the global rankings this year. However, all 14 ranked Chinese cities still rank in the global top 50 most expensive locations for expatriates.

“We have seen a small depreciation of the renminbi against the yen and HK dollar over the past year, this has led to Shanghai and Beijing falling below Tokyo and Hong Kong in the rankings,” said Quane. “However, this does not truly reflect the general trend seen in China over the past five years* with locations in Mainland China averaging a 54 place increase in the global rankings over this time period. It is likely that major Chinese cities will remain expensive destinations for mobile executives for the foreseeable future.”

Singapore has remained relatively stationary in the Asia Pacific regional rankings, moving down to 10th position from 9th last year, it has climbed one place to 18th position on the global stage.

Global highlights

Luanda has fallen from 2nd position last year to 8th place this year, also losing its title as Africa’s most expensive location surveyed in 2016 to Kinshasa.

Australian locations continue to fall significantly down the rankings – a reflection of the weakened Australian dollar as growth there has slowed over recent years. Sydney remains the most expensive city in Australia, however, it currently ranks 70th in the global rankings, down from last year’s 57th place. All ranked locations within Australasia fell in our global rankings this year, with Christchurch falling the most by 34 places to 90th position.

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 rankings. Although Manhattan has fallen to 21st place globally, down from last year’s 20th spot. This is only one of two US locations to have fallen in the global rankings, with the 30 ranked locations here rising seven places on average.

Buenos Aires is no longer the most expensive location in Latin America. The Argentine capital now ranks 163rd globally – in sharp contrast to last year when it was 40th. The peso significantly weakened against some major currencies between annual surveys, after it had remained artificially high in the run up to the presidential elections in 2015. Port of Spain, in Trinidad and Tobago, is now the most expensive location in the region for expatriates ranking at 105th globally.

Israel remains the Middle East’s most expensive country for expatriates with Tel Aviv and Jerusalem occupying the top two spots in the region at 22nd and 23rd place respectively.

Top 20 most expensive cities in Europe for international assignees
Location
Regional rank -
Global rank -
 
2016
2015
Difference
March 2016
Zurich
1
1
-
2
Geneva
2
2
-
3
Basel
3
4
▲ 1
4
Bern
4
3
▼ 1
5
Oslo
5
5
-
20
Copenhagen
6
7
▲ 1
25
Stavanger
7
6
▼ 1
26
Helsinki
8
8
-
35
Stockholm
9
10
▲ 1
45
Gothenburg
10
11
▲ 1
55
Central London
11
9
▼ 2
65
Paris
12
13
▲ 1
72
Brussels
13
18
▲ 5
86
Outer London
14
12
▼ 2
92
Berlin
15
15
-
94
Vienna
16
20
▲ 4
99
Edinburgh
17
14
▼ 3
102
Antwerp
18
22
▲ 4
111
Dublin
19
23
▲ 4
114
Munich
20
25
▲ 5
115

 

Top 20 most expensive cities worldwide for international assignees
Country
Location
Global rank -
 
 
March 2016
March 2015
Democratic Republic of Congo
Kinshasa
1
7
Switzerland
Zurich
2
3
Switzerland
Geneva
3
4
Switzerland
Basel
4
6
Switzerland
Bern
5
5
Sierra Leone
Freetown
6
-
Japan
Tokyo
7
16
Angola
Luanda
8
2
Hong Kong
Hong Kong
9
12
China
Shanghai
10
8
China
Beijing
11
9
Japan
Yokohama
12
28
Japan
Nagoya
13
31
Japan
Osaka
14
33
China
Guangzhou
15
14
Uzbekistan
Tashkent
16
59
Korea Republic
Seoul
17
10
Singapore
Singapore
18
19
Guinea
Conakry
19
17
Norway
Oslo
20
11

-ENDS-

Notes to Editors

  • A cost of living index was not generated in March 2015 for Freetown in Sierra Leone due to Ebola threats in the area
  • * Please note that when ‘five years’ is referenced in the text this is referring to ECA’s previous five-year survey period - from March 2012 to March 2016

About ECA International

ECA International is the market leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.

Partnering with thousands of clients on every continent, we provide a fully integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.

We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.

ECA International: Mobility solutions for a world that’s constantly moving.

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 2012 to 2016 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, and 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.

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