• Both Auckland (58) and Wellington drop (79) drop four places in ranking
  
  
• Sydney drops from 9 (2013) to 26 in 2014 Mercer Cost of Living survey
  
  
• Luanda in Angola is the world’s most expensive city for the second year in a row
   

Auckland and Wellington have experienced a drop of four places in Mercer’s 2014 Cost of Living Survey. Auckland fell from 54^th to 58^th position in 2014 while Wellington fell from 75^th to 79^th ranking on the index.

Mercer's authoritative survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city, and all cities are compared against it. Currency movements are measured against the US dollar.

The survey covers 211 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

Martin Lewington, Managing Director at Mercer NZ said: “This is one time when dropping on an index is not a bad thing.  Wellington’s and Auckland’s small drop in rankings is down to exchange rates and the strength of the US dollar compared to the New Zealand.  The results mean ex-pats’ dollars will go further in New Zealand than they would in say Shanghai, so we become more attractive for global talent.  It does not mean New Zealand cities have become cheaper for New Zealanders.”
The strengthening of the Chinese yuan and currencies in Western Europe against the US dollar has also seen countries in these regions become more expensive, and drive New Zealand cities down the list.

“The results of the Index are promising for companies looking at establishing headquarters in the region or relocating expats.  It’s important to also remember that there are other important factors that make this part of the world an attractive hub to access growth markets such as our living conditions, culture and security,” Mr Lewington said.

“Compared to last year, we were looking at ensuring salaries adequately reflected the difference in cost of living to an employee’s home country in order to attract and retain talent. Now, we’re provided with a lot more flexibility in setting salaries and attracting employees from the global talent pool, knowing the expat dollar will go a lot further here,” he said.

Across the pond, Australian cities experienced some of the most dramatic falls in the ranking this year.  Sydney, currently ranked Australia’s most expensive city for expatriates, has dropped a huge seventeen places from nine to twenty-six. Melbourne (33) dropped seventeen places while Perth (37) fell nineteen spots. Brisbane (52) and Canberra (53) dropped outside the top fifty after having both previously been inside the top thirty. Adelaide (59) has also fallen twenty five spots from its 2013 ranking.

“Rankings in many regions were affected by recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices,” said Ed Hannibal, Partner and Global Leader for Mercer’s Mobility practice.

“While Luanda and N’Djamena are relatively inexpensive cities, they are quite costly for expatriates since imported goods come at a premium. In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly as well. This is generally why some African cities rank high in our survey," said Mr Hannibal.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Bern, Moscow, and Shanghai. Karachi, ranked 211, is the world’s least expensive city for expatriates, and the survey found that Luanda is more than three times as costly as Karachi.

According to Mr. Hannibal, “While multinationals continue to recognise the importance of having a global workforce and corporate assignments remain prevalent, they must be able to monitor and balance the cost of their expatriate programs. Employers need to evaluate the impact of currency fluctuations, inflation, and political instability when sending employees on overseas assignments while ensuring they retain talented employees by offering competitive compensation packages.”

Currency fluctuations and the impact of inflation on goods and services have influenced the cost of expatriate programs as well as the city rankings.

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Interestingly, several cities jumped up the list this year following large increases in both accommodation cost and demand, coupled with strong local currencies. Dhaka and Nairobi (both 117) and Dubai (67) soared thirty seven, thirty and twenty-three spots, respectively.”

The Americas

Cities in the United States have climbed in the ranking due to the relative stability of the US dollar against other major currencies, in addition to the significant drop of cities in other regions which resulted in US cities being pushed up the list. A rise in the rental accommodation market pushed New York up 8 places to rank 16, the highest-ranked city in the region. Los Angeles (62) climbed 10 places from last year while San Francisco (74) jumped eighteen places. Among other major US cities, Honolulu (97) is up twenty places, Miami (98), is up sixteen places, and Boston (109) is up fourteen spots. Cleveland (167) and Winston Salem, North Carolina (182) remain the least expensive surveyed cities for expatriates.

Mr. Hannibal added, “Even though we saw US cities rise in the rankings this year due in part to the strength of the US dollar, it’s important to note that relative costs shift with currency volatility, making overseas assignment costs sometimes greater and sometimes smaller.”

In South America, São Paolo (49) ranked as the costliest city, followed by Rio de Janeiro (65).

Yet, both cities dropped thirty and thirty-six positions, respectively, as a result of the Brazilian real weakening against the US dollar despite increases in rental prices. Buenos Aires also dropped significantly this year to rank 86, following the devaluation of its currency, and despite a strong price increase for goods and services. Other cities in South America that fell on the list of costliest cities for expatriates were Santiago, Chile, dropping twenty-five places to rank 88 and Bogota, falling thirty-eight places to rank 98. Managua, Nicaragua (207) is the least expensive city in South America.

As explained, the exchange rate has a major impact on a city ranking. This year Mercer left Caracas out of the ranking due to the multiple, complex exchange rate situation; its ranking would have varied greatly depending on the official exchange rate selected.

Canadian cities dropped in this year’s ranking with the country’s highest-ranked city, Vancouver, falling thirty-two places to rank 96. Toronto (101) dropped thirty-three spots, while Montreal (123) fell twenty-eight spots. Calgary’s ranking dropped to rank 125. “The Canadian dollar weakened significantly against the US dollar, which accounts for the major slips we saw in this year’s ranking,” explained Mr. Hannibal.

Europe, the Middle East, and Africa

Four European cities remain in the top 10 list of most expensive cities. Zurich (5) is the most costly European city on the list, followed by Geneva (6) and Bern (8). Switzerland remains one of the most expensive locations for expatriates following the slight strengthening of the Swiss franc against the US dollar. Moscow (9) and St. Petersburg (35) dropped seven and twelve spots, respectively, due to a dramatic depreciation of the ruble against the US dollar.

Overall, Western European cities have all risen in the rankings mainly due to the strengthening of local currencies against the US dollar. In particular, cities in the United Kingdom and Germany experienced some of this year’s biggest surges in the ranking, with Glasgow (108) rising forty-nine places from 2013, while Aberdeen (94) and Birmingham (90) jumped thirty-four and forty-five spots, respectively. Munich (55) rose twenty-six places from last year, Frankfurt (59) jumped twenty-four spots, and Berlin (68) soared thirty-one places from its previous ranking.  Dusseldorf and Hamburg also rose significantly.

Other cities that jumped in the ranking include Paris (27), up ten places from last year, Milan (30), up eleven spots, Rome (31), up thirteen and Vienna (32) up sixteen spots.

Ms. Constantin-Métral explained, “Despite moderate price increases in most of the European cities, European currencies for the most part slightly strengthened against the US dollar, which pushed most Western European cities up in the ranking. There have been some increases in accommodation costs, due to strong demand for rentals, which has also been behind upward movement in rankings for some European cities – most notably Copenhagen, Amsterdam, and Frankfurt.”

Most cities in Eastern and Central Europe, however, fell in the ranking as a result of local currencies depreciating against the US dollar. Prague (92), Almaty (111), and Minsk (191) fell nineteen, sixteen, and four spots, respectively, despite there being stable accommodations in these locations.

Tel Aviv (18) continues to be the most expensive city in the Middle East for expatriates, followed by Beirut (63), Dubai (67), and Abu Dhabi (68). Jeddah, Saudi Arabia, (175) continues to rank as the least expensive city in the region. “Several cities in the Middle East experienced a jump in the ranking, as they are being pushed up by other locations’ decline, as well as the strong increase for expatriate rental accommodation costs, particularly in Abu Dhabi and Dubai,” said Ms. Constantin-Métral.

Quite a few African cities continue to rank high in the 2014 survey, reflecting high living costs and prices of goods for expatriate employees. Luanda (1) remains the most expensive city for expatriates across Africa and globally, and Ndjamena follows in second place. Victoria, Seychelles (13) is the next costliest city in Africa followed by Libreville, Gabon (19). In South Africa, Cape Town (205) fell eight places in the ranking, reflecting the weakening the South African rand has suffered against the US dollar.

Asia Pacific

Four of the top 10 cities in this year’s ranking are in Asia. The most expensive city, Hong Kong (3), jumped three places from last year. Singapore (4) is the next most expensive city in the region, gaining one position from last year, followed by Tokyo, which ranked 7 dropping four places this year. Jumping four spots since last year, Shanghai (10) is the next Asian city on the list, followed by Beijing (11), Seoul (14), and Shenzhen (17).

“Japanese cities have dropped in the ranking this year as a result of the yen’s weakening against the US dollar,” said Ms. Constantin-Métral. “However, Chinese cities jumped in the ranking, including Shanghai, Beijing, and Shenzhen, due to the strengthening of the Chinese yuan.”

Mumbai (140) is India’s most expensive city, followed by New Delhi (157) and Chennai (185). Bangalore (196) and Kolkata (205) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (88) dropped twenty-two places from last year. Kuala Lumpur, Malaysia, ranks 115, followed by Indonesia’s Jakarta which ranked 119, falling forty-eight places from 2013. Hanoi jumped three spots to rank 131. Karachi, Pakistan (211) remains the region’s least expensive city for expatriates.

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 www.imercer.com/col or call Client Services in Warsaw on +48 22 434 5383.

Notes for editors

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

The figures for Mercer’s cost of living and rental accommodation costs comparisons are derived from a survey conducted in March 2014. Exchange rates from that time and Mercer’s international basket of goods and services 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.

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 www.imercer.com/mobility for details. Follow Mercer’s mobility news on Twitter @MercerMobility.

For more information click here

Mercer Cost of Living Survey – Worldwide Rankings 2014

(The Mercer international basket, including rental accommodation costs)
Rank as of March
 

2013	2014	City	Country
1	1	Luanda	Angola
4	2	N'Djamena	Chad
6	3	Hong Kong	Hong Kong
5	4	Singapore	Singapore
8	5	Zurich	Switzerland
7	6	Geneva	Switzerland
3	7	Tokyo	Japan
9	8	Bern	Switzerland
2	9	Moscow	Russia
14	10	Shanghai	China
15	11	Beijing	China
25	12	London	United Kingdom
22	13	Victoria	Seychelles
13	14	Seoul	South Korea
17	15	Copenhagen	Denmark
24	16	New York City	United States
29	17	Shenzhen	China
32	18	Tel Aviv	Israel
21	19	Libreville	Gabon
33	20	Kinshasa	Congo, Democratic Republic of
11	20	Oslo	Norway
45	22	Nouméa	New Caledonia
12	23	Osaka	Japan
35	24	Guangzhou	China
36	25	Lagos	Nigeria
9	26	Sydney	Australia
37	27	Paris	France
40	28	Brazzaville	Congo, Republic of
39	29	Bamako	Mali
41	30	Milan	Italy
44	31	Rome	Italy
48	32	Vienna	Austria
16	33	Melbourne	Australia
46	34	Conakry	Guinea
23	35	St. Petersburg	Russia
49	36	Abuja	Nigeria
18	37	Perth	Australia
42	38	Stockholm	Sweden
52	39	Amsterdam	Netherlands
51	40	Dakar	Senegal
26	40	Nagoya	Japan
55	42	Helsinki	Finland
38	43	Abidjan	Cote d'Ivoire
46	44	Douala	Cameroon
55	44	Yaoundé	Cameroon
57	46	Baku	Azerbaijan
69	47	Nanjing	China
65	48	Qingdao	China
19	49	Sao Paulo	Brazil
67	50	Tianjin	China
61	51	Dublin	Ireland
28	52	Brisbane	Australia
27	53	Canberra	Australia
79	54	Shenyang	China
81	55	Munich	Germany
69	56	Brussels	Belgium
77	56	Luxembourg	Luxembourg
54	58	Auckland	New Zealand
34	59	Adelaide	Australia
83	59	Frankfurt	Germany
62	61	Taipei	Taiwan
72	62	Los Angeles, CA	United States
76	63	Beirut	Lebanon
81	63	Madrid	Spain
29	65	Rio de Janeiro	Brazil
57	66	Yangon	Myanmar
90	67	Dubai	United Arab Emirates
79	68	Abu Dhabi	United Arab Emirates
99	68	Berlin	Germany
85	70	Pointe-a-Pitre	Guadeloupe
84	71	Barcelona	Spain
97	71	Chengdu	China
100	73	Dusseldorf	Germany
92	74	San Francisco, CA	United States
88	75	Riga	Latvia
106	76	Hamburg	Germany
53	77	Tehran*	Iran
90	78	Athens	Greece
103	79	Lyon	France
75	79	Wellington	New Zealand
78	81	Bandar Seri Begawan	Brunei
114	81	Port-au-Prince	Haiti
93	81	White Plains, NY	United States
93	84	Bratislava	Slovakia
101	85	Chicago, IL	United States
59	86	Buenos Aires	Argentina
102	87	Cotonou	Benin
66	88	Bangkok	Thailand
63	88	Santiago	Chile
135	90	Birmingham	United Kingdom
116	91	Stuttgart	Germany
73	92	Prague	Czech Republic
106	92	Washington, DC	United States
128	94	Aberdeen	United Kingdom
109	94	Lisbon	Portugal
64	96	Vancouver	Canada
117	97	Honolulu, HI	United States
60	98	Bogota	Colombia
103	98	Kiev	Ukraine
114	98	Miami, FL	United States
42	101	Djibouti	Djibouti
68	101	Toronto	Canada
89	103	Amman	Jordan
31	103	Niamey	Niger
113	105	Lomé	Togo
131	105	Ouagadougou	Burkina Faso
125	107	Casablanca	Morocco
157	108	Glasgow	United Kingdom
123	109	Boston, MA	United States
129	110	Tallinn	Estonia
95	111	Almaty	Kazakhstan
122	111	Riyadh	Saudi Arabia
127	113	Limassol	Cyprus
87	114	Montevideo	Uruguay
111	115	Kuala Lumpur	Malaysia
144	116	Ljubljana	Slovenia
154	117	Dhaka	Bangladesh
147	117	Nairobi	Kenya
71	119	Jakarta	Indonesia
158	120	Belfast	United Kingdom
131	120	Zagreb	Croatia
120	122	Maputo	Mozambique
95	123	Montreal	Canada
139	124	Algiers	Algeria
97	125	Calgary	Canada
135	125	Dallas, TX	United States
103	125	Manila	Philippines
110	128	Accra	Ghana
148	129	Nurnberg	Germany
139	130	Vilnius	Lithuania
134	131	Hanoi	Vietnam
144	132	Morristown, NJ	United States
126	132	San Jose	Costa Rica
106	134	Havana*	Cuba
130	135	Budapest	Hungary
141	135	Ho Chi Minh City	Vietnam
85	135	Istanbul	Turkey
112	135	Lima	Peru
143	139	San Juan	Puerto Rico
118	140	Mumbai	India
153	141	Leipzig	Germany
150	142	Warsaw	Poland
144	143	Houston, TX	United states
73	144	Brasilia	Brazil
151	145	Panama City	Panama
121	146	Kigali	Rwanda
151	147	Atlanta, GA	United States
141	147	Kuwait City	Kuwait
133	149	Port of Spain	Trinidad and Tobago
154	150	Manama	Bahrain
138	150	Mexico city	Mexico
118	152	Ottawa	Canada
154	153	Cairo	Egypt
163	153	Khartoum*	Sudan
159	153	Seattle, WA	United States
160	156	Minneapolis, MN	United States
124	157	New Delhi	India
162	158	Doha	Qatar
169	159	Bucharest	Romania
160	160	Detroit, MI	United States
163	161	St. Louis, MO	United states
168	162	Pittsburgh, PA	United states
170	163	Rabat	Morocco
167	164	Colombo	Sri Lanka
173	165	Port Louis	Mauritius
173	166	Portland, OR	United States
175	167	Cleveland, OH	United States
170	168	Muscat	Oman
177	169	Phnom Penh	Cambodia
176	170	Guatemala City	Guatemala
180	171	Damascus*	Syria
181	172	Sofia	Bulgaria
172	173	Santo Domingo	Dominican Republic
148	174	Lusaka	Zambia
182	175	Jeddah	Saudi Arabia
163	176	Asuncion	Paraguay
190	177	Quito	Ecuador
186	178	Dar es Salaam	Tanzania
163	178	Kingston	Jamaica
185	180	Tashkent	Uzbekistan
193	181	Harare	Zimbabwe
193	182	Winston-Salem, NC	United States
178	183	Monterrey	Mexico
192	184	Belgrade	Serbia
179	185	Chennai	India
182	186	Addis Ababa	Ethiopia
195	187	Yerevan	Armenia
199	188	Sarajevo	Bosnia and Herzegovina
202	189	Tirana	Albania
198	190	San Salvador	El Salvador
187	191	Minsk	Belarus
199	191	Nouakchott	Mauritania
203	193	Skopje	Macedonia
205	194	Kampala	Uganda
195	194	Tbilisi	Georgia
189	196	Bangalore	India
184	197	Gaborone	Botswana
201	198	Ashkhabad	Turkmenistan
190	199	Banjul	Gambia
204	200	Tegucigalpa	Honduras
209	201	Blantyre	Malawi
210	202	Tunis	Tunisia
187	203	Johannesburg	South Africa
211	204	La Paz	Bolivia
197	205	Cape Town	South Africa
206	205	Kolkata	India
212	207	Managua	Nicaragua
208	208	Islamabad	Pakistan
213	209	Bishkek	Kyrgyzstan
207	210	Windhoek	Namibia
214	211	Karachi	Pakistan

* US trade sanctions prevent Mercer from conducting local-pricing agent surveys. Prices have been estimated based on publicly available information, historic Mercer data, and/or Mercer economic research.

About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @Mercer_NZ