Tuesday, 03 March 2015

Singapore Remains Priciest Global City

  • Singapore retains position as most expensive city; top five unchanged
  • Elsewhere currency slides and falling oil prices are having an impact
  • Kiev, Tehran and Caracas see biggest changes
  • Subcontinent offers best value, with Karachi and Bangalore as world's cheapest

 

Singapore has earned the dubious honour of being the world’s most expensive city for the second year running, according to the findings of The Economist Intelligence Unit's Worldwide Cost of Living Survey, a relocation tool that compares the cost of living between 133 cities worldwide using New York as a base city.

Singapore heads an unchanged top five, with Paris (2nd), Oslo (3rd), Zurich (4th) and Sydney (5th) all remaining structurally expensive. There is plenty of movement lower down the list however, especially relating to exchange rate weakness. Caracas, in Venezuela, falls 124 places, from 6th in last year’s ranking to 4th from bottom this year. Kiev (Ukraine) and Tehran (Iran) fall 38 and 61 places, respectively.

It is not just emerging markets that are prone to slides. Tokyo in Japan, which was replaced as the world's most expensive city last year, has fallen to 11th place as low inflation and a weak Yen take their toll. Conversely, Seoul, in South Korea, is rising quickly up the rankings. Ranked 50th five years ago, it is now in the top ten.

"The situation of an unchanged top five is very rare for the Worldwide Cost of Living Survey and disguises some significant global drivers that are impacting the cost of living everywhere," comments Jon Copestake, Chief Retail & Consumer Goods Analyst and editor of the report at the The Economist intelligence Unit. "In fact, a look at the data six months ago would have shown a different top five, and things are changing quickly, especially with the fall in oil prices. Rebasing the survey to today's exchange rates would put Zurich top, highlighting how fluid the global cost of living has become."

Despite topping the ranking, Singapore still offers relative value in some categories. For basic groceries, Singapore is only 11% more expensive than New York, but it is the joint most expensive place in the world alongside Seoul to buy clothes, with the malls of Orchard Road offering a price premium that is over 50% higher than New York. Most significantly, Singapore's complex Certificate of Entitlement system makes car prices excessive, with Singaporean and transport costs almost three times higher than in New York.

Karachi in Pakistan and Bangalore in India offer the best value for money. Indian cities make up four of the six cheapest. Structurally low wages and price subsidies on some staples have made for a highly price sensitive market and it seems that falling oil prices will add further weight to this.

A summary of the full report can be downloaded at www.eiu.com/wcol2015

 

The ten most expensive cities in the world

Country

City

WCOL index (New York=100)

Rank

Rank movement

Singapore

Singapore

129

1

0

France

Paris

126

2

0

Norway

Oslo

124

3

0

Switzerland

Zurich

121

4

0

Australia

Sydney

120

5

0

Australia

Melbourne

118

6

0

Switzerland

Geneva

116

7

-1

Denmark

Copenhagen

115

8

2

Hong Kong

Hong Kong

113

9

4

South Korea

Seoul

113

9

6

 

The ten cheapest cities in the world

Country

City

WCOL index (New York=100)

Rank

Rank movement

Pakistan

Karachi

44

132

-2

India

Bangalore

44

132

n/a*

Venezuela

Caracas

45

130

-124

India

Mumbai

45

130

1

India

Chennai

46

129

n/a*

India

New Delhi

48

128

1

Iran

Tehran

49

126

-61

Syria

Damascus

49

126

1

Nepal

Kathmandu

51

125

2

Algeria

Algiers

52

124

2

*Chennai and Bangalore are being ranked for the first time

 

How Asian cities rank

 

Country

City

WCOL index (New York=100)

Rank

Rank movement

Singapore

Singapore

129

1

0

Australia

Sydney

120

5

0

Australia

Melbourne

118

6

0

Hong Kong

Hong Kong

113

9

4

South Korea

Seoul

113

9

6

Japan

Tokyo

109

11

-5

New Zealand

Auckland

106

15

2

Japan

Osaka

105

16

-2

New Zealand

Wellington

105

16

3

New Caledonia

Nouméa

103

18

12

Australia

Brisbane

102

21

0

Australia

Perth

99

24

-3

China

Shanghai

99

24

-3

Australia

Adelaide

99

24

13

China

Shenzhen

97

28

11

China

Dalian

91

39

3

China

Beijing

86

46

1

Thailand

Bangkok

81

57

4

Taiwan

Taipei

79

61

-1

China

Qingdao

79

61

10

China

Suzhou

77

67

4

China

Guangzhou

76

69

-4

China

Tianjin

76

69

4

Vietnam

Hanoi

76

69

13

Malaysia

Kuala Lumpur

72

81

9

Vietnam

Ho Chi Minh City

70

83

7

Indonesia

Jakarta

70

83

7

Cambodia

Phnom Penh

66

97

6

Bangladesh

Dhaka

66

97

7

Brunei

Bandar Seri Begawan

65

99

2

Philippines

Manila

65

99

12

Sri Lanka

Colombo

59

115

5

Nepal

Kathmandu

51

125

2

Iran

Tehran

49

126

-61

India

New Delhi

48

128

1

India

Chennai

46

129

n/a*

India

Mumbai

45

130

1

Pakistan

Karachi

44

132

-2

India

Bangalore

44

132

n/a*

*Chennai and Bangalore are being ranked for the first time

 

END

About The Economist Intelligence Unit

The Economist Intelligence Unit (The EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com

The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.

 

About the Survey

The Worldwide Cost of Living is a bi-annual Economist Intelligence Unit survey that over 400 individual prices across 160 products and services in 140 cities in 93 countries. The survey itself is a purpose built internet tool designed to calculate cost-of-living allowances and build compensation packages for expatriates and business travelers. It incorporates easy-to-understand comparative cost of living indices between cities. The online interactive survey allows for city to city comparisons, but for the purpose of this report all cities are compared to a base city of New York, which has an index set at 100.

 

Methodology

More than 50,000 individual prices are collected in each survey round conducted each March and September and published in June and December. EIU researchers survey a range of stores: supermarkets, mid-priced stores and higher priced specialty outlets. Prices reflect costs for more than 160 items—from food, toiletries and clothing, to domestic help, transport, and utility bills—in each city. These are not recommended retail prices or manufacturers’ costs; they are what the paying customer is charged.

Prices gathered are then converted into a central currency (US dollars) using a prevailing exchange rate and weighted din order to achieve comparative indices. The cost-of-living index uses an identical set of weights that is internationally based and not geared toward the spending pattern of any specific nationality. Items are individually weighted across a range of categories and a comparative index is product using the relative difference by weighted item.

Cities are compared on a base and host location basis, where the index for a base city is set at 100 and the index of the host city is set as a proportion of this. In the case of this report the base city is set as New York.

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