Recent research reveals that New York has dethroned Hong Kong as the world’s most expensive city for expatriates to live in.
The robust performance of the dollar in 2023, with high inflation and soaring rental prices, pushed the Big Apple to claim the number one spot among the 207 cities surveyed across 120 countries and territories. The rankings of the report by ECA International, a data and software company, are based on factors such as accommodation costs, food prices, public utilities, and entertainment. This shift in the global ‘Cost of living’ landscape can be attributed to various economic factors, including the strength of the dollar, inflation rates, and rental price increases.
Europe’s Expensive Destinations
Geneva retains its position as the most expensive European city for expatriates, followed by London in fourth place. However, this year several UK cities witnessed a decline in ranking including Birmingham, Cardiff, and Belfast, which fell outside the top 100. ECA International’s head of production, Steven Kilfedder, attributes this downward trend to the weakening of the pound, making the UK more affordable for individuals relocating from other countries.
Apart from global inflation, one significant factor affecting expatriate costs in various countries has been the Russian invasion of Ukraine. The surge in accommodation costs in cities where Ukrainian refugees sought shelter resulted in increased expenses for expats as well. Polish cities, particularly Krakow and Warsaw, experienced substantial rises in rental prices, driving their position up in the global rankings. Similar scenarios unfolded in cities like Dubai, Yerevan, Nicosia, and Tbilisi, as these were the main cities Russians expatriated to. Istanbul experienced the biggest rise in rankings, climbing 95 places to 108th, attributed to a combination of factors such as geopolitical events and economic policies.
Europe witnessed over half of its cities, and nearly two-thirds in the eurozone, moving up in the rankings, primarily due to inflation. However, Scandinavian cities such as Oslo, Stavanger, Stockholm, and Gothenburg experienced a decline in rankings. Mr. Kilfedder explains that the Cost-of-Living rankings are influenced by both prices and exchange rates. Despite rapid price increases in parts of Europe, cities can become relatively more affordable for visitors if their currencies weaken. This accounts for the drop in rankings for Norwegian and Swedish cities due to currency depreciation.
Changes in the Americas and Asia
The strength of the dollar resulted in higher rankings for all US cities. Mexico City experienced the most significant rise across North America, reaching 92nd place due to a strong peso and high inflation. In Asia, many major cities dropped in the rankings. However, Singapore stood out by climbing into the top five most expensive cities globally, up from 13th position in 2022. Chinese cities, on the other hand, dropped in rankings due to a weaker yuan against other currencies and a lower inflation rate compared to other countries.
The full list:
- New York
- Hong Kong
- San Francisco
- Tel Aviv
- Los Angeles
- Abu Dhabi
- 20. Chicago
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