Revealed: the world's cheapest and most expensive cities for expats to live in 2021

Ashgabat, Hong Kong and Beirut top the list but the cost of living in Dubai and Abu Dhabi eases, new survey finds

Turkmenistan capital Ashgabat, Hong Kong and Beirut are the three most expensive cities in the world for overseas workers this year, according to the annual Cost of Living survey by global consultancy Mercer.

Hong Kong slipped from top position last year while Beirut jumped 42 places into third place as a result of "a severe and extensive economic depression due to the escalation of several crises – the country's largest financial crisis, Covid-19 and the Port of Beirut explosion in 2020", Mercer said yesterday.

More than half of this year's 10 most expensive cities are in Asia. Tokyo and Zurich each dropped one spot to fourth and fifth, respectively, while Shanghai was ranked sixth, up one place from last year.

Singapore moved from fifth into seventh place, according to Mercer.

Rounding off the top 10 were Geneva in eighth position, followed by Beijing and Bern.

The ranking of 209 cities measures the comparative cost of more than 200 items, including housing, transport and food.

This year’s ranking shows how Covid-19 has shaken up the index as countries continue to struggle with the economic fallout from the pandemic.

However, it is good news for overseas workers in Dubai and Abu Dhabi, where the cost of living has fallen due to the diversification of the UAE economy, which softened the blow of low oil prices on gross domestic product, said Mercer.

Dubai was ranked 42nd, down from 23rd place last year, while Abu Dhabi fell from 39th place to 56th during the reporting period.

The UAE economy continues to recover from the pandemic-driven slowdown, aided by Dh388 billion worth of economic support measures. Government initiatives such as retiree visas and the expansion of the 10-year golden visa programme to encourage foreign professionals to settle in the country, have also helped to improve investment sentiment.

Mercer’s survey helps to determine the cost of packages for employees on international assignments, which depend on factors such as currency fluctuations, cost inflation for goods and services and accommodation expenses.

“Cost of living has always been a factor for international mobility planning but the pandemic has added a whole new layer of complexity, as well as long-term implications related to the health and safety of employees, remote working and flexibility policies, among other considerations,” said Ilya Bonic, career president and head of Mercer strategy.

The world’s cheapest city is Kyrgyzstan capital Bishkek, followed by Zambian capital Lusaka and Tbilisi in Georgia, according to Mercer’s survey.

Riyadh was ranked the most expensive city in the GCC, rising two places from last year into 29th position.

Jeddah moved from 104th place to 94th, Manama in Bahrain slipped 19 spots into 71st position while Omani capital Muscat dropped 12 spots to 108th. Kuwait City fell two spots to 115th position while Qatari capital Doha fell 21 places to 130th, the survey found.

The weakness of the dollar drove down costs for overseas workers in the US, despite the rising cost of goods and services.

New York was ranked as the most expensive city in the US, followed by Los Angeles, San Francisco, Honolulu and Chicago, the Mercer survey found.

Meanwhile, a stronger euro resulted in several European cities climbing up the rankings, with Paris rising into 33rd place.

The UK remained steady with London (18) and Birmingham (121) rising by one and eight spots, respectively, Mercer said.

“UK cities have remained relatively stable in the ranking this year due to low inflation and the fact that the pound has remained strong against all major currencies during the pandemic,” said Kate Fitzpatrick, Mercer’s global mobility practice leader for the UK and Ireland.

In Asia, Mumbai is India’s most expensive city despite dropping 18 places in this year’s index due to a relatively weak Indian rupee in comparison with other cities in the ranking, according to Mercer.

Australian cities climbed in this year’s index as the local currency rose against the US dollar.

Sydney is Australia’s most expensive city for overseas employees after rising 35 spots to achieve a ranking of 31 on the index, followed by Melbourne, which climbed 40 spots into 59th position, Mercer said.

Top 10 most expensive cities in 2021

  1. Ashgabat
  2. Hong Kong
  3. Beirut
  4. Tokyo
  5. Zurich
  6. Shanghai
  7. Singapore
  8. Geneva
  9. Beijing
  10. Bern
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