Monday, August 9, 2010

International Cost of Living Index Rank 2010

Tokyo is the costliest city in the world in which to live.

Tokyo is the most expensive city in the world in which to live out of 282 global locations surveyed as at 1 July 2010. While Tokyo is relatively cheap for items such as alcohol & tobacco (ranked 173), it is the most expensive for groceries and healthcare, and second only to Hong Kong for household accommodation costs. Whilst Tokyo has always been relatively expensive, this trend has been strengthened again recently, as a result of the Japanese Yen which has gained in value by about 18% against the United States Dollar in the past two years.

As the most expensive city in the world, Tokyo has an overall cost of living index of 153.2 (New York = 100), while Dubai (ranked 131 in the world) has a cost of living index of 82.15. Therefore Tokyo's cost of living is 86% higher than Dubai. That means that an expatriate earning USD$5,000 per month in Dubai would need to earn USD$9,300 per month in Tokyo to enable them to have the same purchasing power, and therefore a similar standard of living as they had in Dubai. The cost of living for an expatriate is affected by both the availability and prices, of goods and services representative of an expatriate lifestyle, local inflation, and the exchange rate between the home and host country. As a result the cost of living has a significant impact of an expatriate's salary package.

Hong Kong is the second most expensive city in the world for expatriates to live in. The high overall cost of living rank for Hong Kong is primarily a result of two expensive basket groups. Hong Kong is the second most expensive city in the world for healthcare, and is the most expensive city in the world for household accommodation which typically comprises 30% of an expatriate's expenses. Hong Kong is a good example of why many international organizations compensate separately for healthcare as well as household related costs such as housing rental, water, electricity, household gas, household fuels, local rates and residential taxes. Items that are provided by the employer should be excluded from a cost of living index calculation. The cost of living index for Hong Kong excluding healthcare and household related costs is substantially lower than it's overall cost of living index of 127.87 (New York = 100).

Hong Kong is relatively cheap for recreation & culture (ranked 236 in the world), education (ranked 244 in the world), as well as furniture & appliances (ranked 263 in the world).

Geneva is the third most expensive city in the world, with a cost of living index of 124.49 (New York = 100), mainly as a result of being relatively expensive in most of the basket groups with the exceptions being alcohol & tobacco (ranked 194 in the world), education (ranked 167 in the world), and communication (ranked 108 in the world), but also due to the 16% strengthening of the Swiss Franc against the Euro over the past 2 years.

Brasilia is the fourth most expensive city in the world. The Brazilian Real has strengthened by 11% against the United States Dollar in the past year, although it is still weaker than it was two years ago. Brasilia is ranked in the top 60 most expensive cities in the world for each of the 13 basket groups.

Oslo is the fifth most expensive city in the world with a cost of living index of 122.05 (New York = 100). The Norwegian Kroner has strengthened by 16% against the Euro in the past year. Oslo is the most expensive city in the world for transport, and the second most expensive city for alcohol & tobacco. Oslo is also expensive for groceries as well as restaurants, meals out and hotels (ranked 5 in the world).

The top 20 most expensive of 282 international locations using all 13 basket groups is as follows:

July 2010 Rank Country, City

1 Japan, Tokyo
2 China, Hong Kong
3 Switzerland, Geneva
4 Brazil, Brasilia
5 Norway, Oslo
6 Switzerland, Zurich
7 Denmark, Copenhagen
8 Liechtenstein, Vaduz
9 Russia, Moscow
10 France, Paris
11 Venezuela, Caracas
12 Monaco, Monaco
13 Australia, Sydney
14 United Kingdom, London
15 Angola, Luanda
16 Austria, Vienna
17 Australia, Canberra
18 Germany, Munich
19 Italy, Milan
20 Gabon, Libreville

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