The lack of good accommodation, high rentals and costly imported goods have seen Luanda in Angola, one of Africa's major oil producers but also one of the countries on the continent with the highest poverty levels, become the most expensive destination for expatriates this January 2014, for the first time according to the latest Xpatulator.com cost of living rankings. Rental costs, the shortage of expatriate accommodation in certain locations, currency fluctuations and the impact of inflation on goods and services have affected the global city rankings and therefore impacted the cost of expatriate programs over the past year. Household Accommodation, which includes rentals, is one of the biggest cost of living expenses for employees and comprises 30% of the cost of an expatriate's expenditure.
Expats should be aware, when researching a move to another city or country, that while property may be cheap for local people, this may not be the quality of accommodation suitable for most expats. Often the most expensive expatriate accommodation is found in relatively poor or low cost countries, due to the fact that very little appropriate housing exists.
The Swiss cities of Zurich and Geneva still maintain their positions in the top 10 despite the decrease in accommodation costs and a stable and strong Swiss Franc.
Caracas moves up the rankings from January 2013 despite the large falls in the value of the Bolivar. This increase is mainly due to the increase in inflation of between 30 and 40% in 2013, and the severe shortages of imported goods.
Companies who send their employees on assignments here, should continuously monitor the situation to ensure that they are adjusting expatriate cost of living allowances appropriately. The increasing pressure on the currency could lead to its further devaluation, however it is pegged to the USD which means it remains considerably overvalued at the moment.
Prices in Caracas' basket groups have increased substantially over the past year. Although a devaluation would initially further increase inflation, the shortage of dollars on goods on shop shelves will worsen if no devaluation takes place.
Tokyo has slipped down through the rankings throughout 2013 having been in the top three most expensive locations up until April 2013, since when it has dropped to sixth most expensive in July 2013, ninth in October 2013, and is now ranked 12th most expensive in the world. This is primarily due to the weaker Yen, which recently hit a five year low, having lost more than 20% to the US Dollar in the past year. Tokyo has however, remained in the top 20 due to high infrastructural costs such as its high rentals.
Rental costs have also contributed to Singapore remaining within the most expensive expatriate locations as well as pushing Chad in Ndjamena up the rankings from 185th to become the 28th most expensive expatriate city.
The weakening currencies against the USD of Argentina (34%), Australia (16%), Brazil (16%), Ghana (25%), India (13%), Indonesia (25%), Malawi (30%), Mongolia (20%), Myanmar (14%), Papua New Guinea (21%), South Africa (26%), Turkey (21%), in the past year, has contributed to lower cost of living indexes for assignees going to these countries, but higher indexes for those being posted from these countries.
Xpatulator's cost of living ranking survey is one of the world's most comprehensive, covering 780 locations, it is designed to help multinational companies and individuals determine mobility allowances for expatriate assignments. New York is used as the base city, currency movements are measured against the US Dollar.
Year to Year Top 10 City Comparison:
|Ranking||January 2014||January 2013|
Top 20 City Rankings (All 13 Baskets)
- Hong Kong
- New York (Manhattan) NY
Top 20 Country Rankings (All 13 Baskets)
- South Sudan
- Cayman Islands
- Netherlands Antilles
Top 20 City Rankings (Excluding Housing, Medical and Transport)
- Luanda most expensive in Africa and Globally
- Chad biggest mover up rankings
- Tunis least expensive in Region
- Caracas most costly location in The Americas
- New York, Manhattan second most expensive
- Brazilian cities becoming cheaper for expats overall
- Asia Pacific cities slip down the rankings
- Tokyo no longer in Top Three
- Regional cost of living lower for Expats
- Moscow continues to move steadily up the rankings
- Swiss cities still most expensive for expatriates
- Europe is slowly stabilizing from the economic slump
- Abu Dhabi and Doha, biggest movers down global rankings
- However, Doha remains most expensive in Middle East
- Iran biggest mover up rankings
- Male most expensive in this region
- Indian cities still in Top Ten
- Bhutan, Thimphu remains cheapest
While on international assignments ensure that you or your employee's spending power is not compromised by changes in inflation, the availability of goods as well as exchange rates. Multinational companies will often include a cost of living allowance in their pay packages to ensure that employee's remuneration packages are not compromised by changes in the relative cost of living.
Reference: The cost of living ranking information contained in this article is updated quarterly using data collected by Xpatulator.com over the past 12 months. The international cost of living indexes, on which the rankings are based, is only available using Xpatulator.com's online expatriate calculators that enable users to create personalized cost of living comparison reports which include:
- Salary Purchasing Power Parity Calculator
- Cost of Living Allowance Calculator
- Cost of Living Index Calculator
- International Assignment Management Calculator
Published by Xpatulator.com on 15 January 2014
All 780 Location Rankings as at 15 January 2014 - Overall cost of living - All Baskets: