June 26, 2018

Canada, Toronto

Mercer’s 24th annual Cost of Living Survey finds Asian, European, and African cities most expensive locations for employees working abroad



Multinationals prepare for the Future of Work with focus on mobile talent

Toronto jumps ten spots (109) to join Vancouver as the most expensive cities in the Canadian rankings

Most Canadian cities drop in rankings due to relatively stable market conditions

Ottawa, ranked 160, is the least expensive city in Canadian rankings

As a result of the digital era, aging populations, skills shortages, and unpredictable political and economic contexts, the landscape of global business is changing as are jobs that are critical for the future of work. Multinationals are embracing this transformation by focusing on mobile talent and assessing the cost of expatriate packages for their international assignees. According to Mercer’s 24th annual Cost of Living Survey, factors like instability of housing markets, low inflation, and fluctuating prices for goods and services are impacting the cost of doing business in various cities around the world.

Mercer’s survey reveals that Hong Kong has passed Luanda to take the top spot as the world’s most expensive city for expatriates. Tokyo and Zurich are in second and third positions, respectively, with Singapore in fourth, up one place from last year. This means that four out of five of the world’s most expensive cities for expatriates are now in Asia.

“With technology advances and the importance of a globally connected workforce, deploying talent remains a key component of a multinational’s business strategy,” said Ilya Bonic, President of Mercer’s Career business. “While a mobile workforce allows organizations to achieve greater efficiency, utilize top talent, and be cost effective with international projects, volatile markets and slowing economic growth in many parts of the world require them to carefully assess expatriate remuneration packages.”

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (5), Luanda (6), Shanghai (7), N’Djamena (8), Beijing (9), and Bern (10). The world’s least expensive cities for expatriates are Tashkent (209), Tunis (208), and Bishkek (207).

“Aligning workforce and mobility strategies by ensuring the right employees are in the right place is more critical than ever for multinationals as they focus on new global business models,” said Mr. Bonic. “And, properly compensating employees on international assignments is as important as it can be costly.”

Mercer's widely recognized survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar. The survey includes over 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

THE AMERICAS

Although most Canadian cities dropped in the ranking, the country’s highest-ranked city, Toronto (109), jumped ten places due to an increase in expatriate rental accommodation costs. Vancouver (109) dropped two spots, while Montreal (147) and Calgary (154) fell eighteen and eleven spots, respectively.

“While Toronto’s cost of living ranking has risen, this year’s results – combined with the results of Mercer’s annual Quality of Living Survey released earlier this year – show that Canadian cities provide a world-class quality of living at a relatively moderate cost,” said Gordon Frost, Partner and Career Business Leader for Mercer Canada. “This is a significant strength for Canada and Canadian companies as we compete for top talent in a highly competitive global economy and prepare for the workforce of the future.”

Cities in the United States have dropped in the ranking due to a steady pickup of the European economy, which triggered a decline of the US dollar against other major currencies worldwide. New York dropped four places to rank 13, the highest-ranked city in the region. San Francisco (28) and Los Angeles (35) dropped seven and twelve places, respectively, from last year, while Chicago (51) dropped twenty places. Among other major US cities, Washington DC (56) is down seventeen places, and both Miami (60) and Boston (70) are down nineteen spots. Portland (130) and Winston Salem, North Carolina (161) remain the least expensive US cities surveyed for expatriates.

In South America, São Paolo (58) ranked as the costliest city despite a thirty-two place drop from last year. Santiago (69) followed as the second most expensive location. The majority of other cities in South America fell in the ranking despite price increases on goods and services in countries such as Brazil, Argentina, and Uruguay. In particular, Rio de Janeiro (99) plummeted forty-three spots. Lima (132) dropped twenty-eight places, while Bogota (168) fell fifteen places. Tegucigalpa (201) is the least expensive city in South America. Caracas in Venezuela has been excluded from the ranking due to the complex currency situation; its ranking would have varied greatly depending on the official exchange rate selected.

EUROPE, THE MIDDLE EAST, AND AFRICA

Two European cities are among the top 10 list of most expensive cities. At number three in the global ranking, Zurich remains the most costly European city, followed by Bern (10). Geneva (11) is down four places from last year mainly due to a downward trend in the city’s housing market.

Overall, Western European cities have all risen in the rankings, a result of strong local currencies against the US dollar and the cost of goods and services. In particular, cities in Germany experienced some of this year’s biggest surges in the ranking, with Frankfurt (68) and Berlin (71) jumping forty-nine spots while Munich (57) climbed forty-one places. In the United Kingdom, Birmingham (128) went up nineteen places from last year, Belfast (152) jumped eighteen spots, and Aberdeen (134) climbed twelve places from its previous ranking. London jumped ten spots to rank 19.

Other cities that jumped in the ranking include Paris (34), up twenty-eight places from last year, Rome (46), up thirty-four spots, Madrid (64), up forty-seven, and Vienna (39) up thirty-nine spots. Meanwhile, a few cities in Eastern and Central Europe, including Moscow (17), St. Petersburg (49), and Kiev (173), dropped four, fourteen, and ten spots, respectively, because of local currencies losing value against the US dollar.

Tel Aviv (16) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (26), Abu Dhabi (40), and Riyadh (45). Cairo (188) remains the least expensive city in the region. “On the whole, most Middle Eastern cities have dropped in the ranking, due to decreases in rental accommodation costs throughout the region,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer.

Despite dropping off the top spot on the global list, Luanda, Angola (6) remains the highest-ranking city in Africa. N’Djamena (8) follows, rising seven places. Moving up fourteen spots, Libreville (18) is the next African city on the list, followed by Brazzaville, Congo (19), which is up eleven places. Rising ten spots, Tashkent (209) in Uzbekistan ranks as the least expensive city in the region and globally.

ASIA PACIFIC

This year, Hong Kong (1) emerged as the most expensive city for expatriates both in Asia and globally as a consequence of Luanda’s drop in the ranking due in part to the downward trend in the city’s housing market. Hong Kong is followed by Tokyo (2), Singapore (4), Seoul (5), Shanghai (7), and Beijing (9).

“Stronger Chinese monetary regulation, a flourishing economy and a push to have the Chinese Yuan as an international currency pushed Chinese cities up in the ranking,” said Ms. Traber. “However, significant surges in other locations worldwide caused Japanese cities, Osaka and Nagoya in particular, to fall in this year’s ranking.”

Mumbai (55) is India’s most expensive city, followed by New Delhi (103) and Chennai (144). Kolkata (182) and Bengaluru (170) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (52) jumped fifteen places from last year. Kuala Lumpur (145) also rose in the ranking, up twenty places, while Hanoi (137) plummeted thirty-seven places. Bishkek (207) and Tashkent (209) remain the region’s least expensive cities for expatriates.

Australian cities have fallen in the ranking this year. Brisbane (84) and Perth (61) dropped thirteen and eleven spots, respectively, while Sydney (29), Australia’s most expensive ranked city for expatriates, experienced a relatively moderate drop of five places. Melbourne fell twelve spots to rank 58. “Cities in other countries moved up in the ranking, causing Australian cities to drop,” said Ms. Traber. “In general, cities that fall in the middle of the ranking are at greater risk of experiencing significant changes in their positions due to the movement of other cities.”

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit www.mercer.com/col. To purchase copies of individual city reports, visit https://mobilityexchange.mercer.com/cost-of-living-rankings or call Mercer Client Services in Warsaw on +48 22 434 5383.

Mercer Cost of Living Survey – Worldwide Rankings 2018

(The Mercer international basket, including rental accommodation costs) Rank as of March City Country/Market 2017 2018 2 1 HONG KONG HKSAR 3 2 TOKYO Japan 4 3 ZURICH Switzerland 5 4 SINGAPORE Singapore 6 5 SEOUL South Korea 1 6 LUANDA Angola 8 7 SHANGHAI China 15 8 NDJAMENA Chad 11 9 BEIJING China 10 10 BERN Switzerland 7 11 GENEVA Switzerland 12 12 SHENZHEN China 9 13 NEW YORK CITY United States 27 14 COPENHAGEN Denmark 18 15 GUANGZHOU China 16 16 TEL AVIV Israel 13 17 MOSCOW Russia 32 18 LIBREVILLE Gabon 30 19 BRAZZAVILLE Congo 29 19 LONDON United Kingdom 13 21 VICTORIA Seychelles 42 22 NOUMEA New Caledonia 20 23 OSAKA Japan 42 24 ABIDJAN Côte d'Ivoire 32 25 NANJING China 19 26 DUBAI United Arab Emirates 24 27 TAIPEI Taiwan 21 28 SAN FRANCISCO United States 24 29 SYDNEY Australia 37 29 TIANJIN China 46 31 CHENGDU China 66 32 DUBLIN Ireland 71 33 MILAN Italy 62 34 PARIS France 23 35 LOS ANGELES United States 45 36 QINGDAO China 17 37 KINSHASA Dem. Rep. of the Congo 42 38 SHENYANG China 78 39 VIENNA Austria 22 40 ABU DHABI United Arab Emirates 34 41 NAGOYA Japan 28 42 LAGOS Nigeria 57 43 ASHGABAT Turkmenistan 70 43 YAOUNDE Cameroon 52 45 RIYADH Saudi Arabia 80 46 ROME Italy 46 47 OSLO Norway 84 48 BANGUI Central African Republic 35 49 ST. PETERSBURG Russia 85 50 AMSTERDAM Netherlands 31 51 CHICAGO United States 67 52 BANGKOK Thailand 88 53 HELSINKI Finland 35 54 HONOLULU United States 57 55 MUMBAI India 39 56 WASHINGTON United States 98 57 MUNICH Germany 46 58 MELBOURNE Australia 26 58 SAO PAULO Brazil 41 60 MIAMI United States 50 61 PERTH Australia 93 62 DAKAR Senegal 54 63 ACCRA Ghana 111 64 MADRID Spain 52 65 BEIRUT Lebanon 37 66 DHAKA Bangladesh 104 67 BRUSSELS Belgium 117 68 FRANKFURT Germany 67 69 SANTIAGO Chile 51 70 BOSTON United States 120 71 BERLIN Germany 107 71 LUXEMBOURG Luxembourg 49 73 DJIBOUTI Djibouti 94 73 DOUALA Cameroon 65 75 MONTEVIDEO Uruguay 40 76 BUENOS AIRES Argentina 71 77 CANBERRA Australia 55 77 MANAMA Bahrain 121 79 BARCELONA Spain 64 79 WHITE PLAINS United States 61 81 AUCKLAND New Zealand 122 82 DUSSELDORF Germany 132 83 PRAGUE Czech Republic 71 84 BRISBANE Australia 62 85 DALLAS United States 74 86 HOUSTON United States 77 87 ADELAIDE Australia 125 88 HAMBURG Germany 106 89 STOCKHOLM Sweden 76 90 SEATTLE United States 67 91 YANGON Myanmar 126 92 RIGA Latvia 137 93 LISBON Portugal 59 94 AMMAN Jordan 83 95 ATLANTA United States 79 95 SAN JUAN Puerto Rico 81 97 MORRISTOWN United States 75 97 PORT OF SPAIN Trinidad & Tobago 59 99 ABUJA Nigeria 56 99 RIO DE JANEIRO Brazil 86 101 WELLINGTON New Zealand 86 102 MINNEAPOLIS United States 99 103 NEW DELHI India 130 104 POINTE A PITRE Guadeloupe 137 105 LYON France 100 106 BANDAR SERI BEGAWAN Brunei 91 106 CONAKRY Guinea 141 108 STUTTGART Germany 119 109 TORONTO Canada 107 109 VANCOUVER Canada 139 111 COTONOU Benin 144 112 ATHENS Greece 147 113 BRATISLAVA Slovakia 88 114 PANAMA CITY Panama 81 115 DOHA Qatar 95 116 DETROIT United States 88 117 JAKARTA Indonesia 117 117 JEDDAH Saudi Arabia 92 117 MUSCAT Oman 126 120 BAMAKO Mali 111 121 KUWAIT CITY Kuwait 100 122 ST. LOUIS United States 111 123 NAIROBI Kenya 97 124 HO CHI MINH CITY Vietnam 100 125 CLEVELAND United States 107 125 PITTSBURGH United States 134 125 PORT AU PRINCE Haiti 147 128 BIRMINGHAM United Kingdom 130 128 CASABLANCA Morocco 111 130 GUATEMALA CITY Guatemala 115 130 PORTLAND United States 104 132 LIMA Peru 161 132 LJUBLJANA Slovenia 146 134 ABERDEEN United Kingdom 144 134 LOME Togo 153 134 OUAGADOUGOU Burkina Faso 100 137 HANOI Vietnam 95 138 MANILA Philippines 159 138 ZAGREB Croatia 160 140 TALLINN Estonia 110 141 SAN JOSE Costa Rica 115 142 PHNOM PENH Cambodia 158 143 NIAMEY Niger 135 144 CHENNAI India 165 145 KUALA LUMPUR Malaysia 168 145 NURNBERG Germany 129 147 MONTREAL Canada 161 148 GLASGOW United Kingdom 167 148 VILNIUS Lithuania 172 150 LEIPZIG Germany 176 151 BUDAPEST Hungary 170 152 BELFAST United Kingdom 173 153 LIMASSOL Cyprus 143 154 CALGARY Canada 180 154 WARSAW Poland 123 156 QUITO Ecuador 177 157 MEXICO CITY Mexico 126 158 BRASILIA Brazil 132 158 COLOMBO Sri Lanka 152 160 OTTAWA Canada 171 161 PORT LOUIS Mauritius 140 161 WINSTON SALEM United States 142 163 ISTANBUL Turkey 155 164 KINGSTON Jamaica 156 165 HARARE Zimbabwe 151 165 HAVANA Cuba 169 165 RABAT Morocco 153 168 BOGOTA Colombia 147 169 KIGALI Rwanda 166 170 BENGALURU India 199 170 CAPE TOWN South Africa 189 172 TIRANA Albania 163 173 KIEV Ukraine 156 174 SAN SALVADOR El Salvador 184 175 SOFIA Bulgaria 181 176 BUCHAREST Romania 191 177 JOHANNESBURG South Africa 150 178 SANTO DOMINGO Dominican Republic 188 179 MAPUTO Mozambique 164 180 DAR ES SALAAM Tanzania 198 181 BELGRADE Serbia 184 182 KOLKATA India 136 183 ADDIS ABABA Ethiopia 178 183 ASUNCION Paraguay 179 185 LUSAKA Zambia 182 186 BAKU Azerbaijan 175 187 ALMATY Kazakhstan 183 188 CAIRO Egypt 196 189 GABORONE Botswana 173 190 ISLAMABAD Pakistan 202 191 SARAJEVO Bosnia and Herzegovina 186 192 KAMPALA Uganda 203 193 MONTERREY Mexico 189 194 NOUAKCHOTT Mauritania 187 195 ALGIERS Algeria 206 196 WINDHOEK Namibia 206 197 SKOPJE Macedonia 195 198 YEREVAN Armenia 193 199 LA PAZ Bolivia 194 200 MANAGUA Nicaragua 197 201 TEGUCIGALPA Honduras 200 202 MINSK Belarus 204 203 TBILISI Georgia 205 204 BLANTYRE Malawi 201 205 KARACHI Pakistan 192 206 BANJUL Gambia 208 207 BISHKEK Kyrgyzstan 209 208 TUNIS Tunisia 123 209 TASHKENT Uzbekistan

Source: Mercer’s 2018 Cost of Living Survey

Notes for editors

The list of rankings is provided to journalists for reference and should not be published in full. The top 10 and bottom 10 cities may be reproduced in a table.

The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2018. Exchange rates from that time and Mercer’s international basket of goods and services from its Cost of Living survey have been used as base measurements.

Governments and major companies use data from this survey to protect the purchasing power of their employees when transferred abroad; rental accommodation costs data is used to assess local expatriate housing allowances. The choice of cities surveyed is based on the demand for data.

About Mercer

Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 23,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With more than 65,000 colleagues and annual revenue over $14 billion, through its market-leading companies including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.ca. Follow Mercer on Twitter @MercerCanada.

Mercer also provides advice and market data on international and expatriate compensation management, and works with multinational companies and governments worldwide. It maintains one of the most comprehensive databases on international assignment policies; compensation practices; and data on worldwide cost of living, housing, and hardship allowances. Its annual global mobility conferences and other events provide companies with the latest trends and research on mobility issues. Visit https://mobilityexchange.mercer.com/ for details. Follow Mercer’s mobility news on Twitter @Mercer.