Angola’s Capital Overtakes Hong Kong as the Most Expensive City

Luanda-Angola-costNew York, United States of America, June 21, 2017/ — The latest survey conducted by Mercer, a leading global consulting leader in health has ranked Luanda, Angola’s capital city as the most expensive city for expatriates to live in.

According to the Mercer’s 23rdannual Cost of Living Survey: “Luanda which ranks 1 position  overtakes Hong Kong 2 position as the most expensive city for expatriates to live in”.

The survey found out that Asian and European cities – particularly Hong Kong (2nd), Tokyo (3rd), Zurich (4th), and Singapore (5th) – top the list of most expensive cities for expatriates.

Victoria in the Seychelles ranks 14th most expensive city sharing the same ranking with Moscow.  Cape Town, Blantyre and Windhoek ranks amongst the 15 cheapest cities globally.

The costliest city, driven by cost of goods and security, is Luanda (1st), the capital of Angola. Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (6), Geneva (7), Shanghai (8), New York City (9), and Bern (10).

While the world’s least expensive cities for expatriates, according to Mercer’s survey, are Tunis (209), Bishkek (208), and Skopje (206).

Top 15 Cities Ranking

 

Mercer Cost of Living Survey – Worldwide Rankings 2017

(Mercer international basket, including rental accommodation costs)

Rank as of March City Country
2016 2017
2 1 LUANDA Angola
1 2 HONG KONG Hong Kong
5 3 TOKYO Japan
3 4 ZURICH Switzerland
4 5 SINGAPORE Singapore
15 6 SEOUL South Korea
8 7 GENEVA Switzerland
7 8 SHANGHAI China
11 9 NEW YORK CITY United States
13 10 BERN Switzerland
10 11 BEIJING China
30 12 TIANJIN China
12 13 SHENZHEN China
67 14 MOSCOW Russia
16 14 VICTORIA Seychelles

 

Source: Mercer’s 2017 Cost of Living Survey

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 includes over 400 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

“While historically mobility, talent management, and rewards have been managed independently of one another, organizations are now using a more holistic approach to enhance their mobility strategies. Compensation is important to be competitive and must be determined appropriately based on the cost of living, currency, and location,” said Mr. Bonic.

Europe, the Middle East, and Africa
Only three European cities remain in the top 10 list of most expensive cities for expatriates.

Zurich (4) is still the most costly European city on the list, followed by Geneva (7) and Bern (10). Moscow (14) and St. Petersburg (36) surged fifty-three and one hundred and sixteen places from last year respectively, due to the strong appreciation of the ruble against the US dollar and the cost of goods and services.

Meanwhile, London (30), Aberdeen (146) and Birmingham (147) dropped thirteen, sixty-one and fifty-one spots respectively as a result of the pound weakening against the US dollar following the Brexit vote. Copenhagen (28) fell four places from 24 to 28. Oslo (46) is up thirteen spots from last year, while Paris fell eighteen places to rank 62.

Other Western European cities dropped in the rankings as well, mainly due to the weakening of local currencies against the US dollar. Vienna (78) and Rome (80) fell in the ranking by 24 and 22 spots, respectively. The German cities of Munich (98), Frankfurt (117), and Berlin (120) dropped significantly as did Dusseldorf (122) and Hamburg (125).

African Cities Ranking

Mercer Cost of Living Survey – Worldwide Rankings 2017
(Mercer international basket, including rental accommodation costs)
Rank as of March City Country
2016 2017
185 187 ALGIERS Algeria
2 1 LUANDA Angola
124 139 COTONOU Benin
201 196 GABORONE Botswana
146 153 OUAGADOUGOU Burkina Faso
50 70 YAOUNDE Cameroon
70 94 DOUALA Cameroon
62 84 BANGUI Central African Republic
9 16 NDJAMENA Chad
23 31 BRAZZAVILLE Congo
56 42 ABIDJAN Côte d’Ivoire
6 18 KINSHASA Dem. Rep. of the Congo
40 49 DJIBOUTI Djibouti
91 183 CAIRO Egypt
143 136 ADDIS ABABA Ethiopia
28 33 LIBREVILLE Gabon
179 192 BANJUL Gambia
47 54 ACCRA Ghana
36 91 CONAKRY Guinea
116 111 NAIROBI Kenya
206 205 BLANTYRE Malawi
115 126 BAMAKO Mali
178 189 NOUAKCHOTT Mauritania
175 171 PORT LOUIS Mauritius
130 130 CASABLANCA Morocco
168 169 RABAT Morocco
164 188 MAPUTO Mozambique
209 206 WINDHOEK Namibia
149 158 NIAMEY Niger
13 29 LAGOS Nigeria
20 59 ABUJA Nigeria
139 147 KIGALI Rwanda
79 93 DAKAR Senegal
16 14 VICTORIA Seychelles
205 191 JOHANNESBURG South Africa
208 199 CAPE TOWN South Africa
174 164 DAR ES SALAAM Tanzania
132 144 LOME Togo
203 209 TUNIS Tunisia
187 186 KAMPALA Uganda
200 179 LUSAKA Zambia
157 156 HARARE Zimbabwe

Source: Mercer’s 2017 Cost of Living Survey

“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar, which pushed most Western European cities down in the ranking,” explained Ms. Constantin-Métral. “Additionally, other factors like the Eurozone’s economy have impacted these cities.”

As a result of local currencies depreciating against the US dollar, some cities in Eastern and Central Europe, including Prague (132) and Budapest (176) fell in the ranking, while Minsk (200) and Kiev (163) jumped four and thirteen spots, respectively, despite stable accommodations in these locations.

Ranking 17, Tel Aviv jumped two spots from last year and continues to be the most expensive city in the Middle East for expatriates followed by Dubai (20), Abu Dhabi (23), and Riyadh (52), which have all climbed in this year’s ranking. Jeddah (117), Muscat (92), and Doha (81) are among the least expensive cities in the region. Cairo (183) is the least expensive city in the region plummeting ninety-two spots from last year following a major devaluation of its local currency.
“Egypt’s decision to allow its currency to float freely in return for a 12 billion dollar loan over three years to help strengthen its economy resulted in the massive devaluation of the Egyptian Pound by more than 100% against the US dollar, pushing Cairo down the ranking” said Ms. Constantin-Métral.”

Quite a few African cities continue to rank high in this year’s survey, reflecting high living costs and prices of goods for expatriate employees.

Luanda (1) takes the top spot as the most expensive city for expatriates across Africa and globally despite its currency weakening against the US dollar. Luanda is followed by Victoria (14), Ndjamena (16), and Kinshasa (18). Tunis falls six spots to rank 209 as the least expensive city in the region and overall.

Asia Pacific
Five of the top 10 cities in this year’s ranking are in Asia. Hong Kong (2) is the most expensive city as a result of its currency pegged to the US dollar, which drove up the cost of accommodations locally. This global financial center is followed by Tokyo (3), Singapore (5), Seoul (6), and Shanghai (8).

“The strengthening of the Japanese yen along with the high costs of expatriate consumer goods and a dynamic housing market pushed Japanese cities up in the ranking,” said Ms. Constantin-Métral. “However, the majority of Chinese cities fell in the ranking due to the weakening of the Chinese yuan against the US dollar.”

Australian cities have all experienced further jumps up the global ranking since last year due to the strengthening of the Australian dollar. Sydney (25), Australia’s most expensive city for expatriates, gained seventeen places in the ranking along with Melbourne (46) and Perth (50) which went up twenty-five and nineteen spots, respectively.

India’s most expensive city, Mumbai (57), climbed twenty-five places in the ranking due to its rapid economic growth, inflation on the goods and services basket and a stable currency against the US Dollar. This most populous city in India is followed by New Delhi (99) and Chennai (135) which rose in the ranking by thirty-one and twenty-three spots, respectively. Bengaluru (166) and Kolkata (184), the least expensive Indian cities, climbed in the ranking as well.

Elsewhere in Asia, Bangkok (67) jumped seven places from last year. Jakarta (88) and Hanoi (100) also rose in the ranking, up five and six places, respectively. Karachi (201) and Bishkek (208) remain the region’s least expensive cities for expatriates.

The Americas
Cities in the United States are the most expensive locations in the Americas, with New York City (9) ranked as the costliest city, climbing two spots from last year. San Francisco (22) and Los Angeles (24) follow, having climbed four and three spots respectively. Among other major US cities, Chicago (32) is up two places, Boston (51) is down four places, and Seattle is up seven places. Portland (115) and Winston Salem (140) remain the least expensive surveyed cities for expatriates in the US.

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Overall, US cities either remained stable in the ranking or have slightly increased due to the movement of the US dollar against the majority of currencies worldwide.”

In South America, Brazilian cities Sao Paulo (27) and Rio de Janeiro (56) surged 101 and 100 spots, respectively, due to the strengthening of the Brazilian real against the US dollar. Buenos Aires, the Argentina capital and financial hub ranked 40 followed by Santiago (67) and Montevideo, Uruguay (65), which jumped forty-one and fifty-four places, respectively. Other cities in South America that rose on the list of costliest cities for expatriates include Lima (104) and Havana (151). Dropping from 94th position, San Jose, Costa Rica (110) experienced the largest drop in the region as the US dollar strengthened against the Costa Rican colon. Caracas in Venezuela has been excluded from the ranking due to the complex currency situation. Depending on which exchange rate is being used, the city would arrive at the top or at the bottom of the ranking.

“Inflationary concerns continued to cause some South American cities to rise in the ranking, whereas the weakening of the local currencies in some of the region’s cities caused them to drop in the ranking,” said Ms. Constantin-Métral.

Up thirty-five places from last year, Vancouver (107) has overtaken Toronto (119) to become the most expensive Canadian city in the ranking, followed by Montreal (129) and Calgary (143). Ranking 152, Ottawa is the least expensive city in Canada. “The Canadian dollar has appreciated in value triggering the major jumps in this year’s ranking,” explained Ms. Constantin-Métral.

Bottom 15 Cities Ranking

Mercer Cost of Living Survey – Worldwide Rankings 2017

(Mercer international basket, including rental accommodation costs)

Rank as of March City Country
189 195 YEREVAN Armenia
201 196 GABORONE Botswana
188 197 TEGUCIGALPA Honduras
193 198 BELGRADE Serbia
208 199 CAPE TOWN South Africa
204 200 MINSK Belarus
201 201 KARACHI Pakistan
195 202 SARAJEVO Bosnia and Herzegovina
197 203 MONTERREY Mexico
198 204 TBILISI Georgia
206 205 BLANTYRE Malawi
209 206 WINDHOEK Namibia
199 206 SKOPJE Macedonia
207 208 BISHKEK Kyrgyzstan
203 209 TUNIS Tunisia

Source: Mercer’s 2017 Cost of Living Survey

 

In a rapidly changing world, mobility has become a core component of multinational organizations’ global talent strategy. To support the growing number of international assignees working in an increased number of locations, organizations are focusing on evaluating assignments from a cultural perspective, preparing for regional and lateral moves, and modifying compensation approaches to stay competitive. As organizations grapple with these challenges, they are working hard to accommodate the needs of their workforce and to support employees’ careers. According to Mercer’s 2017 Global Talent Trends Study, fair and competitive pay as well as opportunities for promotion are top priorities for employees this year – not surprising given the current climate of uncertainty and change.

As a result, multinational organizations are carefully assessing the cost of expatriate packages for their international assignees. Mercer’s 23rd annual Cost of Living Survey finds that factors like instability of housing markets and inflation for goods and services contribute to the overall cost of doing business in today’s global environment.

“Globalization of the marketplace is well documented with many companies operating in multiple locations around the world and promoting international assignments to enhance the experience of future managers,” said Ilya Bonic, Senior Partner and President of Mercer’s Career business.

“There are numerous personal and organizational advantages for sending employees overseas, whether for long- or short-term assignments, including career development by obtaining global experience, the creation and transfer of skills, and the re-allocation of resources.”
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