New Global Cost-of-Living Survey Results: Tokyo is Most Expensive; Asuncion, Paraguay is Cheapest

Tokyo remains the world's most expensive city, according to the latest Cost-of-Living Survey by Mercer Human Resource Consulting. Asuncion in Paraguay is the least expensive city in the survey. With New York as the base city scoring 100 points, Tokyo scored 130.7, making it more than three times costlier than Asuncion, Paraguay, which has an index of 42.7. The gap between the world's most and least expensive cities has narrowed marginally this year—by less than two points compared to four points last year and 15 points in 2002.

The survey includes 144 cities and measures the comparative cost of more than 200 items in each location. These include housing, food, clothing and household goods as well as transportation and entertainment. The data are used to help multinational companies and governments determine compensation allowances for their expatriate workers.

London moved up five places in the rankings to second place, followed by Moscow, which moved down a place this year. “There have been some dramatic movements in the rankings this year, which are largely due to currency fluctuations, particularly with the US dollar and the Euro,” says Rebecca Powers, an international consultant with Mercer.

Summary of Key Findings

Europe

• London is the most expensive city in Europe, at #2 in the overall ranking. High accommodation and transportation costs, together with the appreciation of the pound against the US dollar, have pushed the city up in the rankings.
• Geneva is the next most expensive city in Europe (#6), followed by Copenhagen (#8), Zurich (#9) and Milan (#13).
• Bucharest, Romania is the least expensive European city (#129), followed by Limassol, Cyprus, ranking (#95).

North America

• New York remains the most expensive city in North America (#12).
• Other costly cities include Los Angeles (# 27), Chicago (#35) and San Francisco (# 38).
• Pittsburgh is the cheapest of the 20 US cities surveyed, ranking 112.
• All of the US cities have dropped in the rankings due to the depreciation of the dollar against European, Canadian and Asian Pacific currencies.
• Though still relatively inexpensive, Canadian cities continue to move up in the rankings due to the strength of the Canadian dollar. Toronto is in 89th place and has become more expensive than a number of US cities. Ottawa is the least expensive Canadian city, ranked in 124th position.

South America

• Since the devaluation of the Argentinean currency in 2002 and the subsequent financial crisis, cities in Latin America have become among the cheapest in the survey.
• Asuncion, Paraguay is the least expensive city globally at #144. Other cheap cities include Montevideo, Buenos Aires (#143) and Bogotá (#141).
• Lima, Peru is the most expensive city in Latin America at #118.

Australia/Asia

• Four of the world's ten costliest cities are in Asia, with Tokyo being the #1 most expensive city in the world.
• Osaka ranks 4th, followed by Hong Kong in 5th place and Seoul in 7th place.
• Chinese cities, though still relatively expensive, have dropped in the rankings as the Chinese currency is pegged to the US dollar and has therefore been affected by its depreciation. Beijing ranks #11, followed by Shanghai in 16th place.
• Cities in Australia and New Zealand have increased most in the rankings this year due to the significant appreciation of local currencies against the US dollar. Sydney is the most expensive city in the region, rising from 67th place in 2003 to 20th place this year. Auckland is the costliest city in New Zealand (#80). Although these cities have increased in the cost rankings this year, they continue to rate among the highest for quality of life.

Here's a look at the top 20 most expensive cities, according to the Mercer survey:

Individual reports are produced for each city surveyed. For additional information or to purchase copies of the city reports, visit www.mercerHR.com/costofliving or call Mercer Global Information Services at 800-333-3070.