# 2005 worldwide cost of living survey results released



## LaJollaCA (Nov 10, 2002)

Tokyo and Osaka are world’s most expensive cities; Asuncion in Paraguay is cheapest 
Many Eastern European cities have risen sharply in the rankings 
Ottawa in Canada is the cheapest North American city


Find out more about Mercer's Cost of Living Reports

Tokyo remains the world’s most expensive city, followed by Osaka, according to the latest Cost of Living Survey from Mercer Human Resource Consulting. London moves down one position in the rankings to take third place, followed by Moscow which also drops a place this year. Asuncion in Paraguay is the least expensive city in the survey.



With New York as the base city scoring 100 points, Tokyo scores 134.7 and is more than three times costlier than Asuncion, which has an index of 40.3. 



Mercer’s survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.



“Currency fluctuations and exchange rates can have a huge impact on how much expatriates receive and what they can buy with that money,” commented Yvonne Sonsino, Partner at Mercer. “The challenge for multinational companies is to ensure their expatriate compensation packages remain fair and attractive enough to retain key employees, while making sure they do not pay over the odds and find themselves at a competitive disadvantage.



“While there has been significant investment by multinationals in traditionally ‘low-cost’ countries, the gap appears to be closing and local salaries are shooting up as a result of higher living expenses and an increased demand for skills,” she said. “Companies need to keep pace with the changes, and we find that many are now seeking guidance as they make regular review of their expatriate compensation packages a standard procedure.”

There have been some significant changes in the rankings this year which are primarily due to exchange rate fluctuations, particularly of the US dollar and Euro.

Europe
London remains the most expensive city in Europe, with a score of 120.3. “Steep accommodation and transport costs together with the appreciation of the pound against the US dollar have contributed to the city’s high ranking,” said Marie-Laurence Sepede, Research Manager at Mercer. Scores are based on the cost of living for expatriates who are likely to stay in Central London, where accommodation is more expensive. Other UK cities are less costly, with Glasgow in 40th position and Birmingham in 47th place (scores 87.5 and 85.8).



Moscow is the second most expensive city in Europe ranked in 4th position (119), followed by Geneva in 6th place (113.5) and Zurich in 7th place (112.1). Other high-scoring cities include Copenhagen ranked 8th (110), Oslo, which has moved up from 15th to 10th place due mainly to the appreciation of the Norwegian Krone against the US dollar, and Milan ranked 11th (104.9). 



Budapest in Hungary ranks in 24th position (score 93.3) and is the costliest city of the countries that joined the EU last year. “Many cities in the new EU accession countries have risen sharply in the rankings this year, as they make strides to bring their economic infrastructure up to EU standards. Central and Eastern Europe are becoming increasingly attractive for investment by multinationals,” commented Ms Sepede. Warsaw, Prague and Bratislava have all risen by more than ten places.



Bucharest in Romania is the least expensive European city in 103rd place (71.4), followed by Limassol in Cyprus ranked 100th (71.9). 

The Americas
New York remains the most expensive city in North America, at 13th position in the rankings (score 100). Other costly cities include Los Angeles ranked 44 (86.7), San Francisco in 50th place (84.9) and Chicago in 52nd position (84.6). Washington DC takes 78th place (77.4). Winston Salem is the cheapest US city surveyed, ranked 119th (66.6). “Many of the US cities surveyed have fallen in the rankings due to the weakening of the dollar against the Euro, Canadian dollar and Asian Pacific currencies,” commented Ms Sepede.



Though still relatively inexpensive, Canadian cities continue to move up in the rankings due to the strength of the Canadian dollar. Toronto is the most expensive city and takes 82nd place (76.2) in the rankings, while Ottawa is the least expensive Canadian city and takes 122nd position (66.4). 



Following the devaluation of the Argentinean currency in 2002 and the subsequent financial crisis, cities in South America remain among the cheapest in the survey. Asuncion in Paraguay is the least expensive city globally, at 144th position with a score of 40.3. Other cheap cities include Buenos Aires, Montevideo and Caracas in places 142 (score 50.3.), 140 (53.5) and 138 (54.4) respectively. Lima in Peru is still the most expensive city in South America at position 118 with a score of 66.9.



San Juan in Puerto Rico is the costliest city in Central America and the Caribbean, ranked 74th (score 77.7). San Jose is the least expensive in 135th place (58), replacing Santo Domingo in the Dominican Republic which has moved up to 99th place (72.3) due to the appreciation of the Dominican Peso against the US dollar and low inflation last year. 

Asia
Four of the world’s ten costliest cities are in Asia, with Tokyo being the most expensive city globally. Osaka takes 2nd position due to the strengthening of the Japanese Yen relative to the US dollar, (121.8) followed by Seoul in 5th place (115.4) and Hong Kong ranked 9th (109.5). “Chinese cities have dropped significantly in the rankings as the currency is pegged to the US dollar and has therefore been affected by its depreciation,” said Ms Sepede. Beijing is at position 19 (score 95.6) followed by Shanghai in 30th place (90.4).

Australasia
Auckland and Wellington move up in the rankings this year to positions 69 and 76 respectively (scores 79.6 and 77.5) due to the significant appreciation of the New Zealand dollar against the US dollar. Sydney is still the most expensive city in the region at 20th place with a score of 95.2. Other high-scoring cities in Australia include Melbourne in 68th position (80) and Brisbane in 84th place (74.9).


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## eddyk (Mar 26, 2005)

One thing stands out from that....


Australasia instead of Oceana...they need to get with the times.


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## Guest (Jun 20, 2005)

I wouldn't put too much weight into figures related to food, clothing or household goods. As an example, if the list of "food" items includes say item X then that product will always be cheaper in it's home market. It's all to do with importation costs and economies of scale. As the US is the world's largest consumer market, the products in the list will be weighted more towards them, rather than smaller markets. As an example, I'd bet that something like hamburgers would be in the list due to the numbers sold. I don't believe they are anywhere near as popular in Asia though. Sushi, on the other hand, is much cheaper in Japan than here, but I bet it's not in the list of items. Any index that only incorporates 200 items is going to be wildly inaccurate.


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## Ionizer (Jun 8, 2005)

List of cities covered 


*Overall Cost of Living – Ranking
Base city: New York (=100)
Rankings Index
2005 2004 City Country 2005 2004*

1 1 TOKYO Japan 134.7 130.7
2 4 OSAKA Japan 121.8 116.1
3 2 LONDON United Kingdom 120.3 119
4 3 MOSCOW Russia 119 117.4
5 7 SEOUL South Korea 115.4 104.1
6 6 GENEVA Switzerland 113.5 106.2
7 9 ZURICH Switzerland 112.1 101.6
8 8 COPENHAGEN Denmark 109.5 102.2
8 5 HONG KONG Hong Kong 109.5 109.5
10 15 OSLO Norway 105.3 96.2

11 13 MILAN Italy 104.9 98.7
12 17 PARIS France 102.2 94.8
13 12 NEW YORK CITY, NY United States 100 100
13 14 DUBLIN Ireland 100 96.9
15 10 ST. PETERSBURG Russia 99.5 101.4
16 19 VIENNA Austria 97.8 92.5
17 21 ROME Italy 97.3 90.5
18 22 STOCKHOLM Sweden 96.8 89.5
19 11 BEIJING China 95.6 101.1
20 20 SYDNEY Australia 95.2 91.8

21 23 HELSINKI Finland 95.2 88.8
22 25 DOUALA Cameroon 93.8 88.3
23 18 ISTANBUL Turkey 93.8 93.5
24 26 AMSTERDAM Netherlands 93.3 88.1
25 34 BUDAPEST Hungary 93.3 84.5
26 24 ABIDJAN Côte d'Ivoire 93 88.7
27 76 WARSAW Poland 91.5 75.4
28 49 PRAGUE Czech Republic 90.8 83.3
29 31 TAIPEI Taiwan 90.6 85.3
30 16 SHANGHAI China 90.4 95.3

31 44 BRATISLAVA Slovak Republic 89.9 83.9
32 40 DUSSELDORF Germany 88.4 84.3
33 39 LUXEMBOURG Luxembourg 88.2 84.3
34 46 SINGAPORE Singapore 88 83.6
34 42 FRANKFURT Germany 88 84
36 47 DAKAR Senegal 87.9 83.4
37 43 MUNICH Germany 87.8 84
38 28 BERLIN Germany 87.7 85.7
39 33 TEL AVIV Israel 87.6 84.8
40 41 GLASGOW United Kingdom 87.5 84.1

41 50 ATHENS Greece 87.2 82.9
41 53 BRUSSELS Belgium 87.2 82.1
43 56 BARCELONA Spain 86.9 81.4
44 27 LOS ANGELES, CA United States 86.7 86.6
45 52 WHITE PLAINS, NY United States 86.6 82.7
46 61 MADRID Spain 86 79.6
47 51 BIRMINGHAM United Kingdom 85.8 82.8
48 59 ZAGREB Croatia 85.2 80.5
49 42 HAMBURG Germany 85 84
50 29 HANOI Vietnam 84.9 85.6
50 38 SAN FRANCISCO, CA United States 84.9 84.3


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## DiggerD21 (Apr 22, 2004)

EarlyBird said:


> I wouldn't put too much weight into figures related to food, clothing or household goods...


I had a similar thought. The basic food alone differs from region to region. While potatoes are basic food in parts of Europe, rice is without doubt the basic food in Asia. I also wonder how they calculate the price for one item in each city. Do they take the cheapest or most expensive possible price by a local retailer or do they calculate an average price (which would make the survey more comprehensive and I guess they calculate the latter)?

Edit: It's interesting that Berlin is a few places before Hamburg. When I was there, I had the impression that nearly everything was cheaper there than in Hamburg. Especially the rents: You can get a nice flat in the center of Berlin for ca. 400€, while you have to pay at least 600€ for a flat of similar size in the center of Hamburg. Public Transport Tickets are also a bit cheaper in Berlin than in Hamburg. I know places in Berlin where you can get a good cocktail for 4,50€ normal price, while you can get such cheap cocktails in Hamburg only during Happy Hours.


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## LooselogInThePeg (Nov 20, 2004)

This survey is grossly inaccurate. "Ottawa is Canada's cheapest city" ? Pffft...I used to live there, it's definitely not the cheapest city in Canada to live in. Obviously the list is far from comprehensive. Ottawa is Canada's fourth largest city in metro. Even if they were only using cities of over a million, Edmonton and Montreal are definitely cheaper places to live than Ottawa. Not by much mind you but they still are. Calgary may well be as well.


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## mtb_nz (Mar 23, 2005)

eddyk said:


> One thing stands out from that....
> 
> 
> Australasia instead of Oceana...they need to get with the times.


Totally agree... it should be Oceania

but anyway... A very intereting ranking of cities


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## Justme (Sep 11, 2002)

Interesting, but like so many people pointed out, rather inaccurate. For example, they base the rent for London, on living in central London. Of cause this is massively more expensive than living a bit further out, and you don't have to go far out for a massive drop in property prices.


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## peterthegreat (Oct 9, 2003)

Bratislava 31st place?... heh, higher and higher every year...... but I dont know.... hmmm


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## Küsel (Sep 16, 2004)

I wonder that Zurich is just after Geneva - at least I thought Helsinki, Oslo and Milano would be for sure higher rated...


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## WinnipegPatriot (Apr 9, 2005)

I agree with Looselog...I used to live in Ottawa, and if only because the prices of homes are outrageous. Then again, sprawl is somewhat limited given the city's anti-sprawl policies, thus reducing supply. I find many things from groceries, etc more expensive in Ottawa than Winnipeg, Calgary...


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## parallax (Feb 25, 2004)

I always wonder if the people that make up the list have actually tried living in Amsterdam.
It is most defenitely more expensive then some good 6/7 cities that are ranked higher.


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## Monkey (Oct 1, 2002)

Tel Aviv 39th!! last year it was 33th!! goood


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## soulkorea (May 10, 2005)

GODDAMN IT!!!
WHY IS SEOUL SO FREAKING EXPENSIVE!!!
It can't be more expensive than NYC!!!


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## peterthegreat (Oct 9, 2003)

soulkorea said:


> GODDAMN IT!!!
> WHY IS SEOUL SO FREAKING EXPENSIVE!!!
> It can't be more expensive than NYC!!!


believe me... it could be and is more expensive than NYC... I lived there (Seoul) for one year


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## fox1 (Apr 27, 2003)

it's stupid.. shanghai more than Brussels, San Francisco and Frankfurt. 

you can get on a bus in Shanghai for 20c... a 5-hr train ride for $4, and you can have a satisfying dinner for $1.50


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## Englishman (May 3, 2003)

This is entirely based on what business executives would spend their money on, eg London company directors live in central london where prices are most expensive, the cost of hiring cars, taxis, maybe public transport like hte tube, but that's a small proportion of a rich person's wage, basically it's for the more expensive goods. 

The cost of food is most likely to be how much is it to eat in a world renowned restaurant. Entertainment might be a trip to the Theatre or Ballet, or expensive bar. 

This isn't about cost of living for your average joe.


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## fox1 (Apr 27, 2003)

yeah .... i mean, i guess i knew that. still, it is kind of strange. Taxis ARE cheap  in Shanghai anyway.... as is the metro. and a decent business exec would have to delve into real life 'hole in the ground' cheap restaurants at least once...!  .... maybe these guys didn't do any bargaining at all... for anything!... which is, of course, the golden rule of buying things in China, including real estate


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## Englishman (May 3, 2003)

There is a place in Shanghai I think ( or the suburbs) called Thames village. It's basically a mock English town. Houses there go for about $300,000. I could imagine there being some very expensive places. Though I cna't imagine finding many houses for over a $million of which there seem to be many thousands in London. But then Shanghai is a lot further down the list.


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## SUNNI (Sep 20, 2002)

I dont believe Seoul is so high up the list...


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