has been conducting their Cost of Living Survey for many years now. According to their latest study report released recently Tokyo has regained the top spot as the most expensive city in the world for expats. It was surprising as the Japanese economy is not in the best of health and the rents have gone down. But the methodology adopted by Mercer for the study takes into account the relative strength of the currency of the country against the US dollar and New York is taken as the base city and the other cities are measured or compared against it. A total of 214 cities from around the world are covered for the study that measures the cost of a basket of over 200 items in each city. It is a basket of diverse goods and services, including transport, food, clothing, household goods and entertainment.
The cost of housing is the biggest component in the basket and influences the ranking of a city in a big way. Hong Kong and Luanda are the most expensive cities to buy property and are the most expensive cities for luxury apartment rentals. The elaborate study has been designed by Mercer with the aim of helping multinational companies and even governments to fix a reasonable compensation allowances for their expatriate employees positioned in different locations around the world.
Some other cities from Japan have also been ranked quite high on the list making Japan the most expensive country to live in for the expats. Osaka and Nagoya are the two other Japanese cities that find a place in top ten. However people planning to relocate to Japan on some assignment can take heart from the fact that there are ways to manage in a budget by going in for ¥500 lunch boxes and opting for relatively smaller housing outside the city center and not use taxis for commuting. It is the smaller items that are difficult to manage as the average cost of coffee is $8.29 which is twice as much as in New York and the highest in the world. Watching a movie is also an expensive proposition in Tokyo. The average cost of admission is $22.97 which is again the highest in the world.
Nathalie Constantin-Métral, Principal at Mercer led the team that compiled the rankings. She feels that deploying expatriate employees is often the key for expansion of Multinational companies. This ranking helps them determine the right remuneration package to attract and retain the right talent. The shifts in the ranking were mainly influenced by the upward or downward movement of different currencies against the dollar. European cities lost ground because their currencies in general came up worse against the dollar. Asian cities moved ahead particularly the Chinese cities as the Yuan gained in strength against the dollar. Moscow remained the most expensive city in Europe followed by Geneva. Other European cities like London and Paris have slipped as the euro and other local currencies have weakened over the year. Karachi has brought up the rear of the list as the least expensive city. The average cost of living in Karachi is barely a third of the cost of Tokyo. African cities are also ranked fairly high as good and secure accommodation suitable for expats is scarce and hence very expensive. Many consumption items are also imported pushing up their costs.
