Most people who live in important metros often complain about the high cost of living. Their complaints are usually based on the affordability of finding a home and the daily expenses of running that home. The Economist Intelligence Unit Worldwide, which brings out an annual listing of the most expensive cities in the world, bases its Worldwide Cost of Living report on prices across 160 services and products of various commodities such as rent, food, drink and clothing in 133 cities. Cities in Asia have consistently grabbed the top spot in recent years, with Singapore reigning supreme for the past five years. However, this year for the first time in the 30 year history of the survey, three cities have tied for the top position of the most expensive city to live in. While the cost of living in some cities has risen considerably, political instability and deteriorating economic conditions in others have resulted in a sharp drop in the rankings. Although the cost of living may be quite exorbitant in the cities at the top of the list, the one good thing is that there are plenty of economic opportunities for its citizens.
Tokyo was once the most expensive city in the world, holding the top spot off and on for almost two decades since 1992 until it was toppled by Singapore in 2013. Its fall off the top ten is attributed to the weakening of its national currency Yen against the Dollar.
Good economic growth in the United States in 2018 resulted in a sharp appreciation of the US dollar which in turn has led to an increase in the relative cost of living. Los Angeles which had fallen off the top ten rankings in recent years made it back to the list. The most populous city in California is also the financial and commercial center of Southern California and ranked 9th in the Global Economic Power index. Renowned for being the home of Hollywood, the city attracts many visitors and migrants which in turn leads to a burden on resources and rising prices.
Tied with Los Angeles for the tenth spot, the cost of living in the economic and technological center of Israel has risen considerably over the past five years. The cost of basic items like bread and milk has soared with a renewed development of the city. Tel Aviv which is the largest economy per capita in the Middle East is also ranked 25th in the Global Financial Centers Index.
In recent years the financial capital of the world had also slipped in the most expensive city rankings because of a weakening of the dollar. However, New York City now back in the top ten, having jumped six spots up the rankings with the rise of the dollar. With the city being home to the highest number of billionaires in the world, no wonder it is constantly ranked high up when it comes to the most expensive cities in the world.
It’s quite difficult to imagine that the capital city of Denmark was once a Viking fishing village. The city which has undergone a massive transformation in its infrastructure in recent years is now one of the major financial centers of Northern Europe. The service sector has been the reason for Copenhagen‘s economic growth and it tying with Seoul and New York for the seventh-place can be attributed to the relatively high costs of recreation, transportation, and personal care.
Seoul, South Korea
The largest metropolis of South Korea and its capital city is strategically situated along the Han River. In the years that followed the Korean War, South Korea’s economy saw a rapid surge which transformed the country from a developing nation into a developed one. Referred to as the ‘Miracle on the Han River,’ this glorious period of economic growth is held as a model for other developing countries. The city was transformed into the 4th largest metropolitan economy in the world in 2014, accompanied by rising costs of living. Home to the headquarters of 15 Fortune Global 500 companies, Seoul is ranked 6th in the Global Financial Centers Index and the Global Power City Index.
Osaka which was traditionally considered Japan‘s economic hub moved up six positions in the latest rankings to tie for 5th place with Geneva. It has one of the most productive hinterlands in the world along with London and Paris and is also home to the Osaka Securities Exchange. Osaka was always considered the center of commerce in Japan right from the middle and pre-modern ages but many major companies moved their main offices to Tokyo over the years. The city thus began a program to attract foreign and domestic investment and this is probably one of the reasons for the rise in the cost of living in the city.
The reason why the Swiss cities of Geneva and Zurich are in the top five of the rankings is due to the high costs of personal care, recreation, entertainment, and household expenses. These commodities ranked much higher than any other city in the world. The presence of numerous international organizations in the city such as the United Nations headquarters and the Red Cross has made Geneva a worldwide center for diplomacy. In fact, Geneva has the distinction of hosting the highest number of international organizations worldwide. It has a service-oriented economy that specializes in private banking and financing of international trade.
A hub for roads, railways and air traffic ensures that the largest city in Switzerland is always bustling. Despite its relatively small population, Zurich is among the largest financial centers in the world with several banking institutions headquartered here. The fourth most prominent stock exchange in the world, the Swiss Stock Exchange is also located in the city. Zurich‘s high quality of life is often cited as the reason for its economic growth. The city has been consistently ranked as one with the highest quality of life in the world. Like its counterpart Geneva, facilities like personal care, entertainment, recreation, and household expenses are more expensive than any other country in the world.
Since 2013, Singapore has consistently held onto the top spot as the most expensive city in the world. Classified as an Alpha+global city, Singapore has a great influence on the global economy. It has the distinction of being the only Asian city with an AAA sovereign rating from all the major rating agencies. The city has the 2nd highest GDP per capita in the world and a highly developed market economy. With an economy that is termed as the most business-friendly, innovative, competitive, dynamic and freest, it is no wonder that the tiny nation attracts major investments.
Paris has been at the top of the rankings since 2003 but jumped three spots this year to share the top podium with Hongkong and Singapore. One of the main financial hubs of Europe, Paris is home to the headquarters of the top ten French companies listed in the Fortune Global 500. Although Paris’ economy is largely dominated by services, it is still an important manufacturing center for automobiles, aeronautics and eco industries. The city is home to some of the richest neighborhoods in France but the distribution of wealth is not equally balanced making it extremely difficult for the poorer sections to cope with the rising cost of living.
Despite the civil unrest and political upheaval in Hong Kong in the past year, the city still managed to jump three spots from last year’s ranking to be rated as the most expensive city in the world. Once a sparsely populated area of farming and fishing villages, Hong Kong is now regarded as one of the world’s most important commercial ports and financial centers. The Hong Kong Stock Exchange is the seventh-largest in the world and the city is also the tenth-largest trading entity in imports and exports. Tourism accounts for a large chunk of the economy, with Hong Kong being the most popular Chinese city for tourists.
Just So You Know…
- The cheapest city in the world is Venezuela’s capital, Caracas, due to hyperinflation and crumbling economic conditions. This spot was previously occupied by Syria.
- Due to currency depreciation and high inflation, emerging economy cities like Moscow, St. Petersburg, Tashkent and Istanbul fell severely in the rankings. While Istanbul slipped 48 places to 120 on the list, and Tashkent fell 19 places, the Bulgarian capital Sofia climbed 29 spots.