Same procedure as every year: the latest version of Mercer Consulting’s annual Cost of Living Survey is making the rounds again. The yearly report takes a look at expatriate expenses, from housing over food to leisure, in more than 200 cities around the world.
Just like last year’s top ten list, the 2014 ranking shows a sharp divide: The paradoxically cost-intensive capitals of two rather poor countries contrast with various affluent cities. Once more, the list unites the boomtowns of Asia and the consistently high living standard of stable Switzerland.
The 10 Costliest Destinations
• Luanda, Angola
• N’Djamena, Chad
• Hong Kong
• Singapore
• Zurich, Switzerland
• Geneva, Switzerland
• Tokyo, Japan
• Bern, Switzerland
• Moscow, Russia
• Shanghai, China
A Closer Look at Luanda and N’Djamena
Luanda still ranks at the very top of the Mercer table, while N’Djamena has moved up a little from #4 in 2013.
However, if you have a look at the world’s gross domestic products by state, neither Angola nor Chad count among the wealthier countries by any stretch of the imagination. Their GDPs, as compared on a purchasing power parity basis, rather imply very low living standards for the average resident.
Why then are they such expensive destinations for expatriates? And why do expats keep moving there? While most people will hardly think of either city as a premier destination, both Luanda and N’Djamena do have a well-established expat community. 
In N’Djamena, the foreign community mostly consists of diplomatic staff, employees of humanitarian organizations, and corporate assignees. Since 2003, the lion’s share of Chad’s national wealth has come from the petroleum sector; international companies, mainly from the US and China, have invested there.
Oil is also one of Angola’s key income sources, and both countries boast other natural resources as well, such as diamonds, gold, or uranium. Moreover, unlike unstable Chad, Angola has now put an end to almost three decades of violent unrest and civil war (1975-2002).
The development of Angola’s damaged and much neglected infrastructure requires plenty of qualified personnel, including hire from abroad. The Eurozone crisis makes the former Portuguese colony, with its fast-growing economy and construction boom, pretty popular among youngish immigrants from Portugal.
But life in these cities comes at a price. In places where a significant percentage of the local population lives under the poverty line, adequate accommodation, security measures, and imported consumer goods are all luxuries, which force you to dig deep into your pocket.
From Singapore to Switzerland
The rest of the list requires far fewer explanations for the casual reader. Hong Kong and Singapore have long been (in)famous for their elevated costs of expat living. In the two city states, space is limited, which leads to lots of high-rise buildings as well as soaring real estate prices.
Furthermore, in those meccas of capitalism and global finance, government aid for lower income groups is frequently limited to locals and long-term residents. Plenty of expats who move there for a career boost thus receive competitive salaries, but they are definitely going to need the money!
If Singapore is often called the “Switzerland of Asia”, then Switzerland should perhaps be considered the “Singapore of Europe”: a relatively small country with a highly skilled labor force, a well-developed service sector, a strong finance and insurance industry, and a general reputation for prosperity and stability.
All these factors spell “excellent standard of living”. Alas, it also means paying the equivalent of five US dollars for a simple cup of coffee in beautiful Zurich (and we’re talking just coffee, black or with milk, not a big blended caramel frappuccino).
The Impact of Fluctuating Currencies
Speaking of US dollars: Some of the changes in the ranking are simply due to currency fluctuations. New York City (#16) is used as a base of comparison, and the prices are also compared in USD. Any year-to-year change in exchange rates is therefore reflected in the study.
This explains why both Tokyo and Moscow have dropped a few ranks since 2013. 
When measured against the US currency, both the Japanese yen and the Russian ruble are now slightly weaker than they were last year.
The Chinese yuan, on the other hand, has strengthened. Therefore, Shanghai – indeed one of China’s most expensive places – is the first city in mainland China to move up among the Mercer top 10.
(Source: Mercer.com; image credit: 1) Hong Kong Skyline: A Symphony of Lights by flickr user WiNG) 2) Delapidated apartment building in Luanda, Angola by flickr user Martin H. 3) Zürich and Lake Zürich by Wikimedia Commons user MadGeographer 4) 100 ruble banknote 2013, public domain)
Awesome post.
I understand this is a ranking that excludes involvment with local natives, and points at high ranking international high society members and top employees, who transfer their complete livestile including luxury items, food, car parks including drivers and other household helpers and security staff and pick only secluded areas where they live in an island of their own in the middle of who cares where. If one considers integrating yourself into the local population, this list would look entirely different, with especially Singapore ranking not even in the first one hundred. I lived in Singapore four years and also visited recently. I understand why luxury expats have such high expenses: Singapore enables their citizens to live very economic, IF, and thats important, sticking to a standart level, still higher than any other Asian country. But anybody who demands luxury (security is a zero issue in Singapore) is heavily charged directly and indirectly. Same way I m able to explain why Scandinavian cities have dissapeared from the top ranking. But this would be far too much to expand here in detail
i look at this list and want to cry. because of south africa changing its immigration laws, i may have to leave here if i don’t make a plan. cape town is soooooo cheap it’s unreal. *sigh*
also.. for the very reasons that luanda and n’djamena were on this top of list, port-gentil was, too. it was *nuts*. i couldn’t be surprised if lagos and accra made it there in a few years. sure, you can live cheaply in all of those places. but not if you want things like electricity and water 24/7.
margit: danielle is asking if it’s possible to get a copy of this in portuguese because winging it results in bad grammar. [qv google translate]
@Tokunbo:
Thanks for letting me know about the contentof Danielle’s comment! Unfortunately, there’s no one in our editorial team who would be able to translate this into Portuguese. However, I don’t see a problem withanyone summingup this content in a language other than English and talking about on their site/blog, as long as they refer back to the InterNations blog.
I can really only speak to a couple of the issues mentioned here.
Zurich, Geneva and Bern are all extremely expensive both living as a visitor or as a local. They do however make some of the best coffee I have ever had. Something to do with the roasting at high altitudes and the way they make them. Can also be the great cream they give you for your coffee.
I used to spend a great deal of time there but it is now just too damn expensive.
Argentina on the other hand is an extreme bargain for those with US dollars or Euros. A good coffee in a nice cafe under $2. a Bus about $.30 with the local SUBE Card or $.60 without.
@Jon:
Thanks for commenting!
I’m slightly amused by the fact that my throwaway comment about coffee has garned so many responses. It seems that hot beverages are really serious business! 🙂
And yes, Argentina is probably a nice play to spend money if you are paid in a foreign currency and have a stable job. However, considering the local economy is crashing, it’s probably not much fun for most folks who live there…
….. a Newcomer to this list: Yangon / Myanmar!! Unbelievable high prices for renting office-space or flats to live for foreigners. (small “cheap” flat: starting with over 2000 $ a month) As the building-sector was for long time not showing much activity in Yangon, the sudden demand has made price skyrocketing! And this in a country where the common worker has to make a living from 30-150 $ a month…..
Interesting & enlightening read!!! Thx!
@Nicole: Thank you!
I just came accross with the blog and comments. Well, as a Bolivian living currently in Bolivia, I pretty much understand Neide’s posture. What societal and integration purpose does it serve to have places in twon that can only be accessible to foreigners? Well, of course, one may say that those are not the driving forces behind the market force, but shouldn’t they also be?
Well, I haven’t been able to visit yet Asia nor Africa, but I am afraid I can say that I haven’t ever been to another country that would feel and be cheaper than Bolivia. This may be a reason why foreigners like it so much here.
@Elizabeth:
La Paz is actually #204 on that list – out of 211 cities worldwide. So the survey reflects a local impression of the cost of living in that case.
What societal and integration purpose does it serve to have places in twon that can only be accessible to foreigners?
I think a city like N’Djamena is an extreme example, but in cases like that, the reasons for having a “separate” foreign community are also very obvious. For instance, the German foreign office has just renewed all their travel warnings for Chad.
Due to the instability and civil unrest in the region, foreign nationals may be kidnapped for ransom, among other safety issues. The travel advice boils down to “if you aren’t diplomatic staff, an NGO worker, or have really urgent business in the region, please don’t go there.” Under such circumstances, I’m not surprised at the high living expenses and the emergence of an insular expat community.
Simon – not sure where you buy coffee in Singapore but it is USD5 per cup ++ for “proper” coffee – not the boiled road tar that the locals pass off as Kopi. Just been in Zurich and Bern and I live as expat in Sillypore. Sydney is definitely getting more expensive (WHY??) and Zurich and Bern are definitely on par with Singapore for cost of living.
How about paying 7,5 $ for a cop of regular coffee with or with out milk and sugar ? This is the fact in Finland. Thanks for the high taxes ( = VAT) in what ever You buy or consume.
@Juha:
Wow. For that price, it should really be the best coffee ever!
Hey what about Stockholm, Oslo, London, Cairo, Libreville and Malabo? I agree that Luanda is expensive but there are others which are as expensive as Luanda and should probably share the top the top ranking spot with Luanda.
@Neves:
Some of those cities that you mention are actually fairly high up on the Mercer list. They just didn’t make it among the top 10. For example, London ranks on #12, Libreville is on #19, and Oslo on #20. (And the latter is mostly due to a weakening of the Norwegian currency relative to the US dollar.)
Thank you, Margit, for working so diligently to address all of our comments. In light of all the fuss that this study has produced, I think it may make more sense to change the heading from ‘The 10 Most Costliest Destinations’ to ‘The 10 Most Expensive Cities for Expat Employees on Foreign Assignments’. The rankings should be further qualified to explain that they are listed purely from a US Dollar holder’s (presumably, American) perspective. After all, would, say, a Norwegian moving to Tokyo face the same ominous ‘expenses’ if he were to convert Krone into Yen? By the way, even from a US Dollar holder’s perspective, expenses in Japan are dramatically lower than the ranking would imply. Japan has been enduring a severe deflation of prices over the last 20 years to the point where right now, from a ‘quality of life’ perspective, Japan is the best place to live in the world for both expats AND locals.
@Randy:
I absolutely agree with you that “The 10 Most Expensive Cities for Expat Employees on Foreign Assignments” is actually a more accurate title. However, I’m afraid that there are often charater limits or layout limitations for blogging headlines. 😉
I have tried my best, though, to address those issues (target audience and dependency on currency fluctuations) in the text to explain where the study was coming from.
That’s an interesting point about deflation in Japan! I wonder what exactly keeps Tokyo so high up on the ranking list… maybe finding accommodation on short notice, especially for expat families?
Well,
Indeed. I am an expat from Mozambique in Angola and I can say that my first months here were too dificult. I expend 3 to 4 times if I compare with my cost of living in Mozambique.
Well, I cant complain because you can see people with really bad conditions. A place were a dollar doesnt have any value and with a big gap between poor and rich people (in terms of $) but a small gap in terms of distance (which also can explain the criminality levels here).
For me as African, is really difficult to believe the the most expensive city in the world is in Africa, and also to realise that expensiveness doesnt come along with better living conditions.
@Neide:
Well, the survey doesn’t say that Angola is the most expensive city as such, but the most expensive city for expat employees on foreign assignments. They belong to the richest people in Luanda, I suppose — many of them move there for a limited period of time and would like to have the same standard of living as back home. But if you expect to get similar things in Luanda as in Lissabon or London, you probably have to dig deep into your pocket to pay for them!
Of course, this doesn’t take into consideration what the average Angolan earns or can afford. The ranking in this survey is mostly applicable when you are planning to move abroad/overseas for your career.
Somehow managed to miss Turkey. 65 tL for 2 tiny burgers and a tiny coke and one water. On an average, 7 usd for coffee here, no lie. And that’s anywhere. Turkish coffee is norm. Eating out is ridiculous here. Your lucky if you walk away from burgerking with 40tl spent. Avg income is only 2,000tl. Don’t know how people survive. Oh, and don’t forget gas and car prices. Out the friggin roof.
@April: Turkey is actually fairly low on the list. But please keep in mind that the original survey was aimed at the HR staff of global corporations who might send their employees on foreign assignments to Turkey. Perhaps their higher salaries offset the elevated cost of living.
Another angle in all of this is how many cups of coffee one needs to drink in each location; I find one a day is more than enough in Singapore, where as in Zurich, London and NY it’s more like two. Perhaps this salient point can be weaved into a subsequent version of the article?
@Stewart:
I’m sure that the global differences in beverage consumption among expatriates would warrant a study of their own!
mmmm…
I understand that 5 dollars is the price for a coffee in Zürich not in Singapore…
At any rate, is the taste of coffee as good as the price it costs?
Seems to get very bitter when too expensive.
Have a tea!
@Natalie:
Yes, the coffee price refers to Switzerland, not Singapore. I’ll edit the article to make it clearer.
Alas, tea is also expensive in Zurich! 😉
Guys, I don’t know who writes these articles or where you get them from, but in Singapore “paying the equivalent of five US dollars for a simple cup of coffee” – unless you drink daily at Starbucks it is complete nonsense… going to the local places, you can buy a cup of coffee for less than a buck.
@Ilia:
Sorry for the confusion about the coffee prices in Singapore! I’ve just reread the blog post and the passage in question is indeed ambiguous. However, the USD5 for a cup of coffee was meant to refer to Switzerland, not Singapore. I’ll edit the paragraph to make this clearer.
Interesting article but the point on $5 coffee in Singapore is inaccurate. I am not sure where the blogger is living in Singapore but that is what we would pay for a coffee in Starbucks! The local coffee shop sells coffee at $1! Unless of course you want a fancy imported coffee that is only served in cafés. If the expats choose to live a expat lifestyle, it will be expensive anywhere. If you live like the local in Singapore, you can live very comfortably!
@Julie:
Sorry for the confusion about the coffee prices in Singapore! I’ve just reread the blog post and the passage in question is indeed ambiguous. However, the USD5 for a cup of coffee was meant to refer to Switzerland, not Singapore. I’ll edit the paragraph to make this clearer.
You should see the cost of living (supplies mainly) in the northern provinces of Canada. Simply outrageous.
@Enrique Garcia:
Unfortunately, the Mercer study didn’t include the northern part of Canada. They list some of the major cities, such as Toronto or Vancouver, which dropped significantly as compared to last year’s ranking. But that drop is also due to a weakening of the Canadian dollar as compared to the US currency.
Please remove me from your email list. I can’t block you for some reason.
@Tryvgve:
Could you please send a mail to my colleagues at [email protected]? They’ll take care of this issue – thanks!
I would have thought Monaco would make the top 10 surely!
@Jean-Bart:
The Mercer study looks at about 200 cities where international companies, often from the North American market, frequently send their assignees for work. As Monaco is a fairly small state, and many people who haave to move there for their job prefer to commute from France, I’m not sure it’s even on the list. But that certainly doesn’t mean it’s not expensive!
I would say Sao Paulo is way more expensive than Hong Kong.
@SaoPaulo:
Appprently not for currrent assignees who get paid in US dollars… 🙂
Though Im not living as an expat in a main city like Sao Paulo or Porto Alegre I frequently read your emails and blog.
Interesting … Switzerland, the land were my ancestors come from has 3 expensive cities. And I believe it also comes due to stability and safety of in general.
See you soon … god knows in what city..
@Teo Seifer:
Yes, Switzerland is indeed a very safe and stable country. But it is generally known for a fairly strong currency and a prosperous economy with far higher incomes than, say, in neighbouring Germany. That helps to explain why the local cost of living is also a lot higher.
This is rubbish Beijing is much more bexpenisive than shanghai. Also have untried buying a property in Sydney lately. This advert should be deleted!
@Michael:
I’m afraid that InterNations is in no way responsible for the results of this survey. The Mercer Cost of Living Ranking is a popular survey, though it has some obvious weaknesses that we also explained in the blog post, and that’s why we think it’s an interesting list to report and discuss.
I just came from Singapore, it isn’t $5 for a coffee, it’s about $1.20 USD with or without milk. Something seems off with the results, there was no area where Sydney was less expensive from who I asked in Singapore.
@Simon:
Sorry for the confusion about the coffee prices in Singapore! I’ve just reread the blog post and the passage in question is indeed ambiguous. However, the USD5 for a cup of coffee was meant to refer to Switzerland, not Singapore. I’ll edit the paragraph to make this clearer.
As for the difference between Sydney and Singapore: this study was made by a US consulting ompany which calculates with prices in US dollars only. If currencies fluctuate in comparison to the US dollar, for example if the AUstralian dollar has become a slightly weaker currency as compared against the USD, this then explains why Australian cities have suddenly dropped in the ranking.
Boa tarde
Uma pergunta, quem faz as traducoes dos textos publicados aqui em Portugues? é um profissional ou é um trabalho voluntario?
Pq esse texto nitidamente foi traduzido e muito mau, cheio de erros de gramatica e concordância.
Atenciosamente
Danielle Figueiredo
@Danielle:
I’m sorry, but I don’t speak Portuguese. I think you are talking about translating some texts from or into Portuguese? I’m afraid, though, that I don’t know which texts you are referring to or how I could help you.
In other words, the 10 costliest cities “to live like an expat to western” standards”, otherwise Luanda and N’Djamena probably would not be on the list. But if you want a decent house in the nicer (safer?) part of town, to buy imported foods rather than eat like locals, have private health insurance and so forth, then you will pay dearly, even for basics like pasta and breakfast cereal (I found this in Sierra Leone).
@Layla:
Yes, the survey as published by Mercer Consulting is explicitly geared at a target audience of foreign assignees sent overseas. This accounts for the fact why the capitals of Angola and Chad rank so high.
I lived 3 countries out of the list recently and I have to disagree.
Tokyo is definitely cheaper than New York or London considering deflation and housing and food cost.
I suggest to revise the list.
@Jungyeon Cotter:
This list is not a cost of living index as sourced by a survey of various residents. Mercer Consulting gathers data among a specific target audience (expat assignees) and compares the prices in US dollars to help international companies, especially from the North American market, make decisions concerning their foreign assignments. Individual experiences may, of course, always differ from one year’s survey results in that specific context.
I am a Brazilian with Japanese descendant and I tried to live in Tokyo once. The conditions to live are very difficult indeed it’s not just an expensive city but also they are xenophobic with the Japanese descendants and they just offer heavy work in manufacturers. It’s certainly awful to expat in Japan. Recommend just tourism here!
😉
Laura
You simply cant leave Oslo out of this list. It is by far the most expensive city in the world. A beer at a sports pub (not at a fancy cafe) costs 83 NOK, i.e. 14 USD. A bottled water at the supermarket cost you 6 USD. A regular coffee 5 USD. A single bus ride is 8 USD when ticke is purchased on board. // I live i Oslo and whenever I travel to Geneva, Copenhagen, New York etc. (ie. very expensive cities) they look cheap to me.
@Andrea:
In last year’s study, Oslo was on #11, and a few years ago, it was featured in the top 10.
However, this year Mercer put it on rank 20. But that certainly doesn’t mean that life in Oslo has become cheaper. The costs in the Mercer survey are always measured in US dollars, so if the US dollar gets stronger as compared to the Norwegian currency, Oslo will drop in the ranking.
Well, I think that London experiences a Real Estate boom those days and people from all over the world fancy buying a property there. So, I think that it should make it in the top 10 as well.
PA
@Panagiotis:
In the complete list issued published by Mercer, London is actually on #12 – it missed the Top 10 rather narrowly. Very expensive indeed.