Mercer: expat costs affected by latest currency fluctuations

Mercer’s annual survey compares the cost of accommodation and items including clothes, entertainment, food and transport in 209 cities worldwide to produce a cost of living ranking for each city.

Mercer: expat costs affected by latest currency fluctuations
The Angolan capital Luanda is once again rated the most expensive city for expatriates, according to this year's cost of living survey from Mercer.

High cost of imported goods

The high cost of accommodation for expats and expensive imported goods are prime reasons why Luanda has returned to top spot in the rankings, relegating Hong Kong, last year's leader, to second place in a top 10 where half the cities are in Asia.Mercer's annual survey, which uses New York as its benchmark and is similar to the ECA survey published earlier this month, looks at the cost overseas assignees can expect to pay for accommodation and compares the cost of 200 items, including clothes, entertainment, food and transport, in 209 cities worldwide.Because of the recent strength of the US dollar against many currencies, most Chinese cities have become cheaper along with areas in the eurozone. And sterling's fall against the dollar has seen London slip from 17th place in last year's rankings to 30th this year.

Major impact from currency fluctuations

Kate Fitzpatrick, Mercer's global mobility practice leader for the UK, said, “Currency fluctuations, including the weakening of both the British pound and the euro against the US dollar, have had a major impact on this year's rankings.“As a result, many European cities have been driven down the ranking by around 10 to 20 places. However, in some cases local conditions, for example availability of accommodation, have counter-balanced or exacerbated the impact of currency movements.“UK cities have fallen again this year as the British pound weakened before, and after, the EU referendum last summer. However, London did not drop as far as may be expected, with steep prices keeping London as one of the most expensive cities for expatriates worldwide.“The capital's rental costs remain at the higher end globally and have remained stable, or increased slightly over the last year as construction cannot keep up with demand.”

Asian cities remain the world's most expensive

Other European countries falling substantially down the rankings included Vienna (down 24 places to 78th), Rome (80th), Munich (98th), Frankfurt (117th) and Berlin (120th).Meanwhile, Seoul climbed to sixth place from 15th last year, while Mumbai emerged as one of the biggest movers in the table, surging 25 places to 57th because of its rapid economic growth, high inflation and stable currency.“Although a number of Asian cities remain amongst the world’s most expensive cities, key financial hubs such as Hong Kong and Singapore still continue to attract talent and remain a top choice for relocation,” said Mario Ferraro, Mercer's global mobility leader for Asia, Middle East and Africa.“Although this year’s movements were due mainly to currency fluctuations, in particular against the U.S. dollar, we did see cities, such as Mumbai, move up the ranks due to their strengthening economy and growing opportunities.”
Related news:
New York was the only American city in the top 10. “Overall, US cities either remained stable in the ranking or have slightly increased due to the movement of the US dollar against the majority of currencies worldwide,” said Mercer.Japanese destinations climbed on the stronger yen, high cost of expatriate consumer goods and “dynamic housing market,” added Mercer’s Nathalie Constantin-Metral, who is responsible for compiling the survey.Elsewhere, Sydney rose 17 places to 25th, while Melbourne and Perth both entered the top 50 on the back of a strengthening Australian dollar. The Russian rouble’s gains saw Moscow and St. Petersburg climb up the rankings to 14th and 36th place, respectively.The world’s least expensive city for expats was Tunis, according to the survey, followed by Kyrgyzstan’s capital Bishkek and Skopje in Macedonia.

Mercer's Cost of Living Survey top 10:

  1. Luanda
  2. Hong Kong
  3. Tokyo
  4. Zurich
  5. Singapore
  6. Seoul
  7. Geneva
  8. Shanghai
  9. New York
  10. Bern
For related news and features, visit our International Assignments section.Access hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory  Get access to our free Global Mobility Toolkit Global Mobility Toolkit download factsheets resource centre

Related Articles