Cost of Living: Europeans to find the US Cheaper, while Australia sees Major Increase following initial Impact of Pandemic
- Strength of euro and GBP causes many European locations to jump in ECA International’s Cost of Living ranking
- Perth jumps 51 places (74th) as Australian dollar bounces back
- New York (4th) now more affordable for European expats, as the weakened USD causes all US cities to drop in the ranking
- Asia dominates the top 20 most expensive cities in the world, with nine ranked between 1st and 16th
- Hike in petrol prices impacts cost of living globally. Ranked locations have seen a median rise of 23% in the past five years and 9% rise in the past six months
- Cost of ginger skyrockets across the globe as many sought to guard against illness throughout pandemic. Prices soar by 48% in Rome and by 10% on average globally
- London is the 5th most expensive location in the world according to the latest Cost of Living report from global mobility specialist, ECA International (ECA). Hong Kong retains the top spot globally, while New York (4th) drops from 2nd in the rankings, overtaken by Tokyo (2nd) and Geneva (3rd).
As international business travel and assignments tentatively resume, the cost of living in cities around the world has fluctuated over the last 12 months; therefore, the latest survey’s findings will help businesses to ensure that their employees’ spending power is maintained when they are sent overseas for work.
Steven Kilfedder, Production Manager at ECA International, explained: “This latest cost of living report captures the prices of products and services in March 2021, as the world copes with the effects of the global pandemic. Businesses are now preparing for international travel to resume once restrictions start to ease around the world, and we can see that visiting the US for example will be cheaper than at the beginning of 2020, particularly for Europeans, while sending assignees to Australian cities will be more expensive now than a year ago.”
An example of the price disparity of everyday products and services is in an average medium cappuccino: a coffee at a café in London costs GBP 2.92, compared to GBP 4.79 in Geneva. Meanwhile the cost of ginger has skyrocketed in many countries around the world due to demand for ‘halo foods’ during the pandemic, triggering a global shortage. The price of ginger has increased by 11% on average globally and as much as 68% in Mexico City and 48% in Rome.
Rebounding oil prices drive up global inflation
The cost of petrol has fluctuated considerably over the last year. Prices, which plummeted in early 2020, due to the lack of demand as a result of the pandemic, have since rebounded.
In the UK, petrol prices have risen by 23% in the last five years, and 6% in the past six months alone (approximately £0.08 per litre). In Hong Kong, prices are at a 34% five-year increase (8%, increase in the last six months) and New York a 17% five-year increase (15% in the last six months)
Kilfedder, explained: “Over five years petrol prices have risen almost everywhere, following historic lows in early 2016. While some countries have experienced increases in petrol costs of over 400%, such as Argentina, the UK has seen a 23% increase in the last five years, which is very close to the median rise globally (23%).”
Only seven locations in ECA’s Cost of Living ranking have seen petrol prices drop in the past five years. These cities include South Korea’s Seoul (-1%), Albania’s Tirana (-5%), and Bangladesh’s Dhaka (-10%). In contrast, the locations to see the greatest rise were Argentina’s Buenos Aires (406%), Saudi Arabia’s Riyadh (116%) and Turkey’s Ankara (78%).
European countries some of the costliest locations to live
Despite low levels of inflation, the strength of the euro and the GBP, compared to the weakened USD, has meant that 40% of the top 100 most expensive locations in the world for expats to live are in Europe.
For example, the average cost of a takeaway in Geneva is £10.84, and in London £6.24, compared to just £4.53 in Hong Kong.
Kilfedder adds: “With the easing of restrictions in many European locations, as well as greater clarity around Brexit boosting the euro and pound we’ve seen the majority of locations within Europe rise in the rankings.”
The highs and lows of Asia’s rankings
The yuan has experienced a strong year as the Chinese economy bounced back quickly from the initial impact of the pandemic, making most locations in the country more expensive for overseas workers than in previous years. The majority of Chinese cities have risen in the latest rankings, with popular expat hub Guangzhou (10th) joining Shanghai (9th) in the global top ten for the first time. The Pearl River Delta remains an attractive option for international businesses too, as Shenzhen (12th) rises in the rankings.
Meanwhile, countries heavily reliant on tourism have fallen in the rankings, as low demand has hit their currencies making them cheaper for any visitors able to make it.
Kilfedder added: “Tourism-dependent countries including Thailand, Cambodia and Vietnam have all fallen in the rankings, as their economies work to recover from the pandemic. Bangkok dropped 11 places to 34th, while Hanoi (115th) dropped twenty places, falling out of the global top 100. This is a stark contrast to what ECA reported in March 2020 when many of the Southeast Asian countries were becoming more expensive for expats.”
North American locations see a fall in cost of living rankings, making it cheaper for overseas assignments
The struggling dollar (USD) has led to a drop for US locations in the global rankings, with New York now ranking 4th and San Francisco (15th) dropping out of the global top 10.
Kilfedder said: “Rental prices have dropped in many cities across the US, including San Francisco and Chicago, as city dwellers sought out larger homes outside of traditional city settings as working from home became the new norm. In addition, federal stimulus packages introduced by both Trump and President Biden have impacted supply of currency while demand has fallen, weakening the US dollar.”
West African countries fare well in the rankings due to the strength of the euro
The cost of living ranking of countries throughout Africa has largely been affected by their currency. For example, the strength of the euro has meant Senegal (88st) and Mali (91st), whose currency is the West African franc, have both risen in the rankings and now feature in the top 100 most expensive locations in the world.
Meanwhile, Angola (138th) experienced the biggest fall in rankings for African countries as their currency, the kwanza, has been hit by the pandemic and low oil prices. Kenya (125th), and Zambia (206th) also fell as their currencies weakened and, in the case of Zambia, this was despite inflation rising to over 20%.
Locked down Australia sees significant rises in global ranking
All cities in Australia rose in the latest ranking as the succession of tough lockdown restrictions across most states helped the country to recover comparatively quickly. Sydney (40th) now features in the top 50, though it is Perth (74th) which saw the biggest jump in ranking of any location in the world.
“While strict lockdowns were in place early in the pandemic to halt the transmission of the virus, the country’s economy has seen a significant bounce since restrictions have eased. This is largely due to a strong demand for its commodity exports, which boosted the value of the Australian dollar and therefore pushed Australian cities up the ranking. While Australia is still closed to most international travellers, expats from Europe and the US will find Australian cities far more expensive than before the pandemic compared to their home countries. However, many Australians will not be able to capitalise on the strength of the Australian dollar as foreign travel to outside of the country is virtually non-existent at the moment” Kilfedder comments.
Global top 20 most expensive locations for expatriates
Location Country 2021 Ranking
Hong Kong Hong Kong 1
Tokyo Japan 2
Geneva Switzerland 3
New York United States of America 4
Central London United Kingdom 5
Zurich Switzerland 6
Tel Aviv Israel 7
Seoul Korea Republic 8
Shanghai China 9
Guangzhou China 10
Yokohama Japan 11
Shenzhen China 12
Singapore Singapore 13
Copenhagen Denmark 14
San Francisco United States of America 15
Beijing China 16
Bern Switzerland 17
Jerusalem Israel 18
Oslo Norway 19
Brazzaville Congo 20
European top 20 most expensive locations for expatriates
Location Country 2021 Ranking
Geneva Switzerland 1
Central London United Kingdom 2
Zurich Switzerland 3
Copenhagen Denmark 4
Bern Switzerland 5
Oslo Norway 6
Stockholm Sweden 7
Stavanger Norway 8
Paris France 9
Luxembourg City Luxembourg 10
Dublin Irish Republic 11
Helsinki Finland 12
Amsterdam Netherlands 13
Munich Germany 14
The Hague Netherlands 15
Vienna Austria 16
Reykjavik Iceland 17
Gothenburg Sweden 18
Frankfurt Germany 19
Moscow Russia 20
For further information about ECA International and its Cost of Living report, please visit: https://www.eca-international.com/home
Notes to Editors
Rooster will coordinate comment and interviews for Steven Kilfedder, Production Manager at ECA International
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About ECA’s Cost of Living Ranking
ECA International’s cost of living rankings combine ECA’s Cost of Living research and Accommodation research to enable a comparison of costs faced by expatriates around the world in 208 cities in 121 countries and territories.
This comparison of cost of living is calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons and different levels of shopping efficiency.
ECA’s Cost of Living research
ECA International’s cost of living research is carried out in March and September using a basket of day-to-day goods and services commonly purchased by assignees. The data used above refers to the March 2021 data collection period with changes compared to the March 2020 period. ECA’s Cost of Living rankings began in 2005.
Cost of living indices are used by ECA clients to calculate cost of living allowances for assignees. The research covers:
- Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
- Basic: Household goods; recreational goods; general services; leisure services
- General: Clothing; electrical goods; motoring; meals out; alcohol and tobacco
- Utilities costs
- Public transport
ECA’s Accommodation research
This ranking uses data from ECA’s latest Accommodation reports. The reports have been published annually since 1996.
The reports provide comprehensive and reliable information for locations worldwide on the rental trends, types of accommodation and districts commonly sought by expatriates. To ensure impartiality and to maintain the accuracy of information, data from a number of sources is used to compile each accommodation report. ECA uses a global network of estate agents, relocation agents and extensive in-house research into worldwide property markets to establish and verify the housing data in the reports.
About ECA International
ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.
Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.
We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions – every time.
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