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Oslo, Zurich and Copenhagen the most expensive cities in the world

27 October, 2009 19:33  EasyExpat EasyExpat

Cost of LivingAccording to the latest report from UBS on the cost of living (Prices and Earnings comparison), Oslo, Zurich, Copenhagen, Geneva, Tokyo and New York are the world's most expensive cities in the world. London, the second most expensive city in the 2006 review, plummeted nearly 20 places following the pound’s steep devaluation, landing in the middle of the Western European rankings. Currency devaluation pushed down prices in many emerging market cities as well. Prices slipped the most in Mexico City, Moscow and Seoul. Paris goes up 2 places from 11th to 9th between 2006 and 2009.The survey says: "Since our previous survey, in 2006, the financial crisis has exerted relentless downward pressure on exchange rates in many countries."

Living costs are calculated based on a survey of 154 items in total. They include 122 products and services that are used directly to calculate the reference basket. When rent prices are factored into the equation, New York, Oslo, Geneva and Tokyo emerge as especially pricey places to live. The basket costs the least in Kuala Lumpur, Manila, Delhi and Mumbai. The study was based on data collected in 73 cities around the world between March and April of this year.

Highest food prices in Japan and Switzerland

Tokyo, Zurich and Geneva are the most expensive cities for food, while Mumbai, Delhi and Kiev are at the bottom of the list. It is amazing to notice that geographically, Tokyo and Mumbai are not very far apart. When it comes to food prices, however, they are in different galaxies. In Mumbai, you can buy our basket of food for close to USD 150 – around one-fifth of the asking price in the Japanese capital, Tokyo.

For the analysis, they put together a basket of 39 food items weighted mainly according to Western European consumption habits, whereby very important staples were included in larger
quantities.

The housing markets are heavily fragmented

Global average monthly rent for an unfurnished 3-room dwelling near the city center is around 1110 euros. The most expensive homes in this category are in New York, Hong Kong and Dubai. In terms of average rents, it is noticeable that they have suffered the effects of the crisis in countries of Anglo-Saxon tradition, but they have remained fairly steady worldwide.

To name a few popular destinations for professionals: Montreal (1190 USD / month), London (1450 USD in 2009 against 2390 in 2006), Paris (1600 USD) and Geneva (1900 USD). On the other end you can get a monthly local rent (medium) of 220 USD in Cairo.

Costly rail travel in the United Kingdom and Germany

A second-class one-way ticket for a 200 km rail journey in Germany (USD 67.20) costs approximately 1.5 times as much as in the rest of Western Europe. Only the United Kingdom is more expensive. In London, passengers have to be willing to pay USD 89.10 – double the fares charged in other Western European cities. The rates look even pricier when compared with worldwide averages; travel in Germany costs 2.5 and in the United Kingdom 3.4 times as much as the global average.

Contrary to popular belief in Europe, the London taxis are more expensive than Paris: 17.09 USD in London (for a daytime ride of 5 km within the city), and 15.69 USD in Paris, well above the world average of 9.10 USD.

Mexico City, Kuala Lumpur and Jakarta offer low-cost getaways

The cost of a short city break usually includes much more than just food and accommodation. Whether a trip to a foreign city turns out to be a bargain or a financial black hole depends largely on the general price level and prevailing exchange rates.

The costliest places for a city break package (overnight stay, dinner for two, a taxi ride, car rental, theater, public transport and a handful of minor expenses)– which does not cover travel to and from the destination – are Tokyo, London and Doha. For cheap city trips, tourists can travel to Mexico City, Kuala Lumpur and Jakarta, where a short visit costs less than USD 330.

The average worldwide price for the package is roughly USD 650. On a regional basis, Africa and South America offer the cheapest rates for the package. Mid-range regions are Oceania, Eastern Europe and Asia. The most expensive regions for a short trip are North America, the Middle East and Western Europe. The widest price gap – around 40% – was observed between cities in Asia. Western European metropolises were found to have the lowest price gap.

Earnings highest in Switzerland, Denmark and the US

The survey of 73 international cities found that employees in Copenhagen, Zurich, Geneva and New York have the highest gross wages. Zurich and Geneva – the two Swiss cities in the study – top the rankings in the international comparison of net wages. By contrast, the average employee in Delhi, Manila, Jakarta and Mumbai earns less than one-fifteenth of Swiss hourly wages after taxes.

The case of the iPod

While they still compare the cost of a Big Mac around the world (employees have to work a global average of 37 minutes to earn enough to pay for a Big Mac - but 12 minutes in Tokyo and 2.5 hours in Nairobi), they have introduced a new benchmark for comparison. The iPod nano with 8 GB of storage is an ideal example of a globally uniform product. An average wage-earner in Zurich and New York can buy a nano from an Apple store after nine hours of work. At the other end of the spectrum, workers in Mumbai, need to work 20 nine-hour days – roughly the equivalent of one month's salary – to purchase an iPod nano.

Long working hours in the Middle East and Asia – shortest in France

People work an average of 1,902 hours per year in the surveyed cities but they work much longer in Asian and Middle Eastern cities, averaging 2,119 and 2,063 hours per year respectively. Overall, the most hours are worked in Cairo (2,373 hours per year), followed by Seoul (2,312 hours). People in Lyon and Paris, by contrast, spend the least amount of time at work according to the global comparison: 1,582 and 1,594 hours per year respectively.

Cost of living per continent

Americas:
A dollar earned in the US is worth more after deducting taxes and social security contributions than in neighboring Canada. While the basket of 122 goods and services is somewhat cheaper in Montreal and Toronto, the net hourly wage in these Canadian cities is also lower than in the surveyed US cities of New York, Los Angeles, Miami and Chicago.

Asia-Pacific:
In no other continent is the price spread between the most expensive and the cheapest city as wide as in Asia. While Tokyo ranks as one of the world's five costliest cities, Kuala Lumpur, Manila, Delhi and Mumbai are all at the bottom of the price range. Workers in Tokyo earn the highest wages in Asia. Likewise, consumers in Tokyo, Hong Kong and Taipei have the greatest purchasing power in the continent. Sydney ranks among the top ten cities in the international comparison.

Europe:
Prices in Eastern and Western Europe have converged very little despite the EU's enlargement in 2004 and Slovenia's adoption of the euro as its official currency in January 2007 and Slovakia's in January of this year. A basket of 95 goods and 27 services was roughly 35% cheaper in the cities of Eastern European EU member states than in Western European metropolises. As a comparison, UBS's 2006 study found that the price differential between Eastern and Western Europe was around 38%. On average, workers in Western European cities receive gross wages more than three times higher than their colleagues in Eastern Europe. The lowest incomes are paid in Bulgaria (Sofia) and Romania (Bucharest). The wage level in these two countries, which joined the European Union in January 2007, is comparable to that of Colombia or Thailand.

We are using the data provided by the UBS study in our Cost of Living Calculator on Easy Expat. Our nifty machine allows you to calculate the salary you should make regarding you current wage and your style of life. Unselect the category of goods you wish to exclude, enter your current salary and choose the current city and the one you want to compare with.

In order to compare different countries, all our data are translated into indexes (e.g. if London/food index is 100, Paris/food index is 93). Therefore the same currency or index is represented in both boxes.

 

   



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London its costs loads [Reply]

The cost of travel in London, well rail travel and petrol and parking are stupidly high. You can travel much more distance in the UK for much less money if you don't travel via London. It is madness

divorce solicitors london     28 Oct 2009, 11:57

[Reply]

divorce solicitors london> The report list a series of cities, not countries. Therefore, we are talking about the cost of travelling in London in comparison to other cities. As you imply in your comment, the cost of traveling through London is very high and indeed, it is madness!

  easyexpat     28 Oct 2009, 12:38