65% using mobility programs to enhance workforce strategies – all industries and countries.  

Cost key elements: currency flux, inflation, volatility in accommodation prices

Reasons for xpats: career development, global experience, new skillsets, re-allocation of resources.

Decision-makers: globalization challenging cities to inform, innovate, compete to attract people and investment – keys to a city’s future.

 

MERCER’S 25TH ANNUAL COST OF LIVING SURVEY FINDS CITIES IN ASIA MOST EXPENSIVE LOCATIONS FOR EMPLOYEES WORKING ABROAD

  • June 26, 2019
  • United States ,New York

In a rapidly changing world, mobility programs have become a core component of multinational organizations’ global talent strategy. Organizations realize that to thrive they must embrace change, adapt to new technologies, and build emerging skills to attract, motivate, and enhance talent.

According to Mercer’s 2019 Global Talent Trends report, 65% of employers across all industries and countries are using mobility programs to enhance their workforce strategies.

As a result, multinational organizations are carefully assessing the cost of expatriate packages for their international assignees.

Mercer’s 25th annual Cost of Living Survey finds that a number of factors, including currency fluctuations, cost of inflation for goods and services, and volatility in accommodation prices, contribute to the overall cost of expatriate packages for employees on international assignments.

“In a skill-focused economy driven by digital disruption and the need for a globally connected workforce, deploying expatriate employees is an increasingly important aspect of a competitive business strategy for global companies,” said Ilya Bonic, President of Mercer’s Career business.

“There are numerous personal and organizational advantages for sending employees overseas, including career development, global experience, new skillsets, and re-allocation of resources. By offering fair and competitive compensation packages, organizations can facilitate moves that drive business results.”

Mercer’s 2019 Cost of Living Survey finds that eight out of the top ten of the world’s most expensive cities for expatriates are Asian cities, resulting from high costs for expatriate consumer goods and a dynamic housing market.  Tokyo (2), Singapore (3) and Seoul (4) top the list, while the costliest city in the world for the second consecutive year is Hong Kong (1).  Other cities appearing in the top ten are Zurich (5), Shanghai (6), Ashgabat (7), Beijing (8), New York City (9), and Shenzhen (10). 

The world’s least expensive:Tunis (209), Tashkent (208), Karachi (207).

Mercer’s widely recognized survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar. The survey includes over 500 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

“Cost of living is an important component of a city’s attractiveness for businesses,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer. “Decision-makers increasingly acknowledge that globalization is challenging cities to inform, innovate, and compete to foster the kind of satisfaction that attracts both people and investment – the keys to a city’s future.”

The Americas

Cities in the United States climbed in the ranking due to the strength of the US dollar against other major currencies as well as the significant drop of cities in other regions. New York jumped four places to rank 9, the highest-ranked city in the region. San Francisco (16) and Los Angeles (18) climbed twelve and seventeen places, respectively, while Chicago (37) jumped fourteen places. Among other major US cities, Washington, DC (42) is up fourteen places, Miami (44) is up sixteen places and Boston (49) is up twenty-one spots. Portland (107) and Winston Salem, North Carolina (138) remain the least expensive US cities surveyed for expatriates.

In South America, Montevideo, Uruguay (70) ranked as the costliest city followed by San Juan (72), which jumped twenty-three spots. Other cities in South America that climbed on the list of costliest cities for expatriates include Panama City (93), San Jose  (131), and Havana  (133) rising twenty-one, ten, and twenty-two spots, respectively. Cities that fell in the ranking despite price increases on goods and services and accommodation costs include Brazil and Argentina. In particular, São Paolo (86) dropped twenty-eight spots. Rio de Janeiro (121) dropped twenty-two places, while Buenos Aires (133) fell fifty-seven places. Managua (200) is the least expensive city in South America.

Although most Canadian cities remained stable in the ranking, the country’s highest-ranked city, Vancouver (112), dropped three places. Toronto (115) dropped six spots, while Montreal (139) climbed eight spots. Calgary (153) and Ottawa (161) remained stable.

Europe, the Middle East, and Africa

Only one European city is among the top ten list of most expensive cities, which is Zurich at number five, followed by Bern (12). Geneva (13) is down two places. Eastern and Central European cities, including Moscow (27), St. Petersburg (75), Prague (97), and Warsaw (173), dropped ten, twenty-six, fourteen, and nineteen spots, respectively.

Cities in Western Europe, including Milan (45), Paris (47), Oslo (61), and Madrid (82), fell in the ranking as well, by twelve, thirteen, fourteen, and eighteen spots, respectively. The German city Stuttgart (126) dropped significantly as did Berlin (81) and Dusseldorf (92). Cities in the United Kingdom saw modest drops, including Birmingham (135), which fell seven places, Belfast (158) six spots, and London (23) four spots.

“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar, which pushed most cities down in the ranking,” explained Ms. Traber, “Additionally, other factors like recent security issues and concern about the economic outlook, have impacted the region.”

Tel Aviv (15) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (33), and Riyadh (35). Cairo (166) remains the least expensive city in the region. “Many currencies in the Middle East are pegged to the US dollar, which pushed cities up in the ranking, as well as steep increases for expatriate rental accommodations,” said Ms. Traber.

Despite dropping from the top ten most expensive cities for expatriates, N’Djamena (11) remains the highest-ranking city in Africa. Following are Victoria (14) rising seven places, and Kinshasa (22) rising fifteen spots. Libreville (24) dropped six places. Dropping one spot, Tunis (209) in Tunisia ranks as the least expensive city in the region and globally.

Asia Pacific

Eight of the top ten cities in this year’s ranking are in Asia due in part to a strong housing market. Hong Kong (1) remains the most expensive city for expatriates both in Asia and globally as a result of the housing market and currency being pegged to the US dollar, driving up the cost of living locally. This global financial center is followed by Tokyo (2), Singapore (3), Seoul (4), Shanghai (6), and Ashgabat, Turkmenistan (7).

Mumbai (67) is India’s most expensive city, followed by New Delhi (118) and Chennai (154). Bengaluru (179) and Kolkata (189) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (40) jumped twelve places from last year. Hanoi (112) and Jakarta (105) also rose in the ranking, up twenty-five and twelve spots, respectively. Bishkek (206) and Tashkent (208) remain the region’s least expensive cities for expatriates.

Australian cities have continued to fall in the ranking due to the depreciation of the local currency against the US dollar. Sydney (50), Australia’s most expensive ranked city for expatriates, dropped twenty-one places. Melbourne (79) and Perth (87) dropped twenty-one and twenty-six spots, respectively.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit https://mobilityexchange.mercer.com/Insights/cost-of-living-rankings. To purchase copies of individual city reports, visit https://mobilityexchange.mercer.com/multinational-approach-cost-of-living-data or call Mercer Client Services at +48 22 434 5383.

About Mercer

Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 23,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With 75,000 colleagues and annualized revenue approaching $17 billion through its market-leading companies including MarshGuy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.

Mercer also provides advice and market data on international and expatriate compensation management, and works with multinational companies and governments worldwide. It maintains one of the most comprehensive databases on international assignment policies; compensation practices; and data on worldwide cost of living, housing, and hardship allowances. Its annual global mobility conferences and other events provide companies with the latest trends and research on mobility issues. Visit https://mobilityexchange.mercer.com/ for details. Follow Mercer’s mobility news on Twitter @Mercer.

Mercer Cost of Living Survey – Worldwide Rankings 2019

(Mercer international basket, including rental accommodation costs)

Rank as of March City Country/Region
2018 2019
1 1 HONG KONG Hong Kong (SAR)
2 2 TOKYO Japan
4 3 SINGAPORE Singapore
5 4 SEOUL South Korea
3 5 ZURICH Switzerland
7 6 SHANGHAI China
43 7 ASHGABAT Turkmenistan
9 8 BEIJING China
13 9 NEW YORK CITY United States
12 10 SHENZHEN China
8 11 NDJAMENA Chad
10 12 BERN Switzerland
11 13 GENEVA Switzerland
21 14 VICTORIA Seychelles
16 15 TEL AVIV Israel
28 16 SAN FRANCISCO United States
15 17 GUANGZHOU China
35 18 LOS ANGELES United States
23 19 OSAKA Japan
14 20 COPENHAGEN Denmark
26 21 DUBAI United Arab Emirates
37 22 KINSHASA Dem. Rep. of the Congo
19 23 LONDON United Kingdom
18 24 LIBREVILLE Gabon
42 25 LAGOS Nigeria
6 26 LUANDA Angola
17 27 MOSCOW Russia
25 27 NANJING China
22 29 NOUMEA New Caledonia
24 30 ABIDJAN Côte d’Ivoire
31 30 CHENGDU China
29 32 TIANJIN China
40 33 ABU DHABI United Arab Emirates
41 33 NAGOYA Japan
27 35 TAIPEI Taiwan
45 35 RIYADH Saudi Arabia
51 37 CHICAGO United States
54 38 HONOLULU United States
19 39 BRAZZAVILLE Congo
52 40 BANGKOK Thailand
36 41 QINGDAO China
56 42 WASHINGTON United States
32 43 DUBLIN Ireland
60 44 MIAMI United States
33 45 MILAN Italy
38 45 SHENYANG China
34 47 PARIS France
66 47 DHAKA Bangladesh
70 49 BOSTON United States
29 50 SYDNEY Australia
39 51 VIENNA Austria
43 52 YAOUNDE Cameroon
65 53 BEIRUT Lebanon
48 54 BANGUI Central African Republic
46 55 ROME Italy
79 56 WHITE PLAINS United States
77 57 MANAMA Bahrain
50 58 AMSTERDAM Netherlands
73 59 DJIBOUTI Djibouti
86 59 HOUSTON United States
47 61 OSLO Norway
85 62 DALLAS United States
63 63 ACCRA Ghana
90 64 SEATTLE United States
53 65 HELSINKI Finland
73 66 DOUALA Cameroon
55 67 MUMBAI India
57 67 MUNICH Germany
95 69 ATLANTA United States
75 70 MONTEVIDEO Uruguay
97 70 MORRISTOWN United States
62 72 DAKAR Senegal
95 72 SAN JUAN Puerto Rico
68 74 FRANKFURT Germany
49 75 ST. PETERSBURG Russia
94 75 AMMAN Jordan
67 77 BRUSSELS Belgium
102 78 MINNEAPOLIS United States
58 79 MELBOURNE Australia
69 79 SANTIAGO Chile
71 81 BERLIN Germany
64 82 MADRID Spain
97 83 PORT OF SPAIN Trinidad & Tobago
71 84 LUXEMBOURG Luxembourg
99 85 ABUJA Nigeria
58 86 SAO PAULO Brazil
61 87 PERTH Australia
106 88 CONAKRY Guinea
81 89 AUCKLAND New Zealand
116 90 DETROIT United States
79 91 BARCELONA Spain
82 92 DUSSELDORF Germany
114 93 PANAMA CITY Panama
122 94 ST. LOUIS United States
93 95 LISBON Portugal
77 96 CANBERRA Australia
83 97 PRAGUE Czech Republic
123 97 NAIROBI Kenya
125 97 PITTSBURGH United States
88 100 HAMBURG Germany
117 100 JEDDAH Saudi Arabia
106 102 BANDAR SERI BEGAWAN Brunei
84 103 BRISBANE Australia
117 103 MUSCAT Oman
117 105 JAKARTA Indonesia
125 106 CLEVELAND United States
130 107 PORTLAND United States
142 108 PHNOM PENH Cambodia
87 109 ADELAIDE Australia
138 109 MANILA Philippines
92 111 RIGA Latvia
109 112 VANCOUVER Canada
137 112 HANOI Vietnam
101 114 WELLINGTON New Zealand
109 115 TORONTO Canada
115 115 DOHA Qatar
91 117 YANGON Myanmar
103 118 NEW DELHI India
121 119 KUWAIT CITY Kuwait
124 120 HO CHI MINH CITY Vietnam
99 121 RIO DE JANEIRO Brazil
132 121 LIMA Peru
105 123 LYON France
120 124 BAMAKO Mali
104 125 POINTE A PITRE Guadeloupe
108 126 STUTTGART Germany
89 127 STOCKHOLM Sweden
111 128 COTONOU Benin
112 128 ATHENS Greece
128 128 CASABLANCA Morocco
113 131 BRATISLAVA Slovakia
141 131 SAN JOSE Costa Rica
76 133 BUENOS AIRES Argentina
165 133 HAVANA Cuba
128 135 BIRMINGHAM United Kingdom
130 136 GUATEMALA CITY Guatemala
134 137 ABERDEEN United Kingdom
161 138 WINSTON SALEM United States
147 139 MONTREAL Canada
140 140 TALLINN Estonia
145 141 KUALA LUMPUR Malaysia
132 142 LJUBLJANA Slovenia
138 143 ZAGREB Croatia
157 144 MEXICO CITY Mexico
134 145 LOME Togo
134 145 OUAGADOUGOU Burkina Faso
148 145 GLASGOW United Kingdom
156 148 QUITO Ecuador
143 149 NIAMEY Niger
173 150 KIEV Ukraine
145 151 NUREMBERG Germany
148 152 VILNIUS Lithuania
154 153 CALGARY Canada
144 154 CHENNAI India
163 154 ISTANBUL Turkey
150 156 LEIPZIG Germany
164 157 KINGSTON Jamaica
152 158 BELFAST United Kingdom
179 159 MAPUTO Mozambique
165 160 RABAT Morocco
153 161 LIMASSOL Cyprus
160 161 OTTAWA Canada
161 161 PORT LOUIS Mauritius
151 164 BUDAPEST Hungary
125 165 PORT AU PRINCE Haiti
172 166 TIRANA Albania
174 166 SAN SALVADOR El Salvador
188 166 CAIRO Egypt
178 169 SANTO DOMINGO Dominican Republic
168 170 BOGOTA Colombia
180 171 DAR ES SALAAM Tanzania
183 171 ADDIS ABABA Ethiopia
154 173 WARSAW Poland
158 174 BRASILIA Brazil
169 175 KIGALI Rwanda
176 176 BUCHAREST Romania
175 177 SOFIA Bulgaria
186 178 BAKU Azerbaijan
170 179 BENGALURU India
170 180 CAPE TOWN South Africa
181 181 BELGRADE Serbia
158 182 COLOMBO Sri Lanka
192 183 KAMPALA Uganda
195 184 ALGIERS Algeria
177 185 JOHANNESBURG South Africa
183 186 ASUNCION Paraguay
193 187 MONTERREY Mexico
165 188 HARARE Zimbabwe
182 189 KOLKATA India
189 189 GABORONE Botswana
187 191 ALMATY Kazakhstan
194 192 NOUAKCHOTT Mauritania
204 193 BLANTYRE Malawi
191 194 SARAJEVO Bosnia and Herzegovina
199 195 LA PAZ Bolivia
185 196 LUSAKA Zambia
198 197 YEREVAN Armenia
202 198 MINSK Belarus
201 199 TEGUCIGALPA Honduras
200 200 MANAGUA Nicaragua
197 201 SKOPJE Macedonia
203 202 TBILISI Georgia
190 203 ISLAMABAD Pakistan
196 204 WINDHOEK Namibia
206 204 BANJUL Gambia
207 206 BISHKEK Kyrgyzstan
205 207 KARACHI Pakistan
209 208 TASHKENT Uzbekistan
208 209 TUNIS Tunisia

Source: Mercer’s 2019 Cost of Living Survey