London retains title as sixth most expensive city in the world

• Prices of electronic items driven up by supply chain issues, as the price of a TV increased 12% in the UK
• Petrol prices rebounded dramatically, rising by 14% in the UK, having fallen 9% in 2020
• Geneva overtakes Tokyo as 2nd most expensive location, as yen depreciates 
• Expats to find New Zealand more expensive due to considerably stronger currency, ranking an average of 18 places higher than in 2020
• 10 of the top 20 most expensive locations in the world are Asian cities, as Chinese cities move up the rankings
• Rampant inflation in Argentina causes Buenos Aires to jump 22 places, despite weakened currency
• Iceland (41st) has risen 22 places as a quick vaccine rollout and boost in tourism strengthened currency
• Inflation and petrol prices had a global impact on cost of living, the UK is not alone in feeling the pinch 

London remains the 6th most expensive location in the world according to the latest Cost of Living report from ECA International (ECA), global mobility specialist. Hong Kong holds on to the top spot, while Geneva (2nd) leapfrogs Tokyo (3rd) and New York (4th), and Tel Aviv enters the top five.

Celebrating its 50th anniversary, ECA analyses costs of consumer goods and services in more than 490 locations worldwide, and rental costs in over 410. ECA has reported its Cost of Living ranking bi-annually since 2005, helping businesses to ensure their employees’ spending power is maintained when sent on international assignments. 

Higher inflation, coupled with the strength of the British pound is one of the reasons London has retained 6th place in the cost of living ranking, despite a weaker rental market in the capital. 

All major UK cities in the ranking have risen an average of eight places, with Cardiff (105th) and Belfast (107th) seeing the greatest rise of 17 and 16 places respectively. Edinburgh and Manchester both remain in the top 100, with Manchester (93rd) rising seven places after seeing costs increase by 2.2% in the last year.

Steven Kilfedder, Production Manager at ECA International, explained: “The UK has seen increased prices for many goods and services due to rising demand and supply chain issues that have affected items including electronic items and petrol. The price of a TV in the UK has shot up by 12%, and petrol is up 14%. This is being felt globally as countries battle with rising inflation due in part to the oil price soaring  and shortages of semiconductors, which have pushed up the costs of many items from televisions to cars. In the latest report, we’re able to highlight which locations are now more affordable for expats, such as Turkey and those in the Eurozone, and locations which are now more costly, including New Zealand and China.” 

Higher oil prices drive up cost of living globally

In just a year oil prices have taken a notable U-turn. In 2020, demand for oil plummeted due to the Covid-19 pandemic. This year, oil prices have risen at a global median of 19%. Some locations have felt the price hikes significantly, including Iran which experienced a 67% yearly increase, Qatar 64%, and Myanmar 58%. The latter having suffered a 90% increase over the last five years, with political unrest a contributing factor. The US has experienced a 27% increase.

The price for petrol in Moscow is now £0.59 per litre versus £1.97 in Hong Kong and £1.48 in London.

Kilfedder continued: “The rouble has seen a rebound in line with a rally to the price of oil after a significant drop in the rankings last year. Russia, along with many other oil producing countries, has benefitted from increased demand and rising oil prices after the drop in prices that followed the start of the pandemic in 2020 ” said Kilfedder.

Canada, the largest oil supplier to the US, has seen all locations rise in the rankings. Montreal (77th) rose 21 places, while Vancouver (47th) has entered the top 50. 

Global top 10 most expensive locations for 1l of petrol (GBP)

Location	£
Hong Kong	1.97
Tel Aviv	1.94
Amsterdam	1.67
Lisbon	1.65
Singapore	1.65
Athens	1.63
Paris	1.53
Rome	1.52
Helsinki	1.52
Berlin	1.48

The Eurozone becomes an attractive option for expats due to weaker currencies

The relative strength of the British pound and US dollar has driven Eurozone locations down in the global ranking compared to a year ago, with significant drops in cities across Europe including France, Spain, and Italy; Lyon (89th) and Milan (74th) both dropped nine places and Madrid (82nd) 13 places, making these locations more affordable for British expats. 

Conversely, Geneva has overtaken Tokyo as the second most expensive location in the world, as the Japanese capital’s response to Covid-19 impacted the economy and the demand for the yen. Meanwhile Zurich has slipped out of the top five.

Denmark’s Copenhagen dropped six places in the ranking, now the 18th most expensive location globally, and the fifth most in Europe, this is largely due to exchange rates with the currency being slightly weaker than that of countries around it in the ranking.

A rebound in tourism and speedy vaccine rollout has resulted in a cost of living hike for expats in Iceland 
Rising 22 places in the global ranking, Iceland’s Reykjavik is once again a costly place for businesses to send expats. Ranked 41st globally, Iceland has experienced a strong currency over the past 12 months, bouncing back from previous lows. 

Kilfedder said: “Iceland was one of the first foreign countries to feature on the UK’s green travel list back in May thanks to its speedy vaccine rollout. Its active volcano, just outside of Reykjavik, was a big tourism attraction earlier in the year, as well as the launch of a brand-new low-cost airline which opened additional travel options for the UK and Europe. This boost in tourism earnings has helped strengthen the exchange rate making it more expensive for visitors.” 

Countries across Asia which typically depend on tourism to prop up the economy are yet to bound back in the latest ranking, with Thailand’s Bangkok (51st) falling 12 places and Pattaya (127th) dropping 23 places, weakening the currency. 

Kilfedder said “The lack of overseas visitors to Thailand has weakened the baht and pushed down demand for prime property in the major cities. These problems have been further exacerbated by an outbreak of Covid-19 in many parts of the country due to issues with the vaccine roll-out leading to falls in the ranking for Thai cities as they get cheaper for visitors.”

Almost all North American cities bounce back, while South America experiences turbulent times

Eleven major locations in North America, including Vancouver, Mexico City, Los Angeles and Washington DC rose in the ranking this year. Meanwhile, San Francisco, California, ranking 13th globally, dropped four places below three Chinese cities and Singapore. The Chinese currency has strengthened against other major currencies thanks to a rebound in the demand for Chinese goods after a Covid-related lull at the beginning of 2020.

Cities in Mexico rose in the ranking, with Mexico City (147th) rising 20 places and entering the top global 150, meanwhile Monterrey (183rd) rose 14 places. The rebound in the value of the peso and a rapid rise in everyday shopping basket prices has made the country more expensive for expats.

In South America, cities in Brazil have risen in the ranking. Rio de Janeiro (144th) is up 21 place and Sao Paulo (159th) is up 16 places, a trend that is echoed across the country. Although prices have risen, inflation is lower in Brazil than in neighbouring countries. It is this rebound in the Brazilian currency that has pushed cities up the ranking though all cities in the country are still much lower in the rankings than in 2019. Argentina, where the currency lost approximately a quarter of its value in the past year, continues to face challenges with steeply rising inflation. This has resulted in Buenos Aires rising over 20 places from last year to 61st. 
Peru (150th), hit badly by the pandemic and currently holding the highest Covid-19 death toll per capita in the world, dropped 29 places. Despite price increases of 6.5%, the Peruvian sol remains weak, making it cheaper for expats. 

Dairy products and petrol make New Zealand a pricey place for expats

A strong currency, 4.9% up against the US dollar and 1.2% up on the British pound combined with rising inflation, particularly for petrol, electronics and dairy goods, has resulted in New Zealand locations moving up significantly in the globally ranking. Auckland (25th) rose 17 places having experienced a 3.8% annual price change. Meanwhile Wellington rose 19 places, ranking 53rd.

Half of the top 20 most expensive locations are in Asia, as Chinese cities all rise in the rankings

Chinese cities all rose in the latest rankings, with four Chinese locations now in the top 15 and Shanghai (9th) and Guangzhou (10th) both entering the global top ten. 

Kilfedder said “Chinese cities have seen a rise in the rankings due to a very good 12 months for the Chinese yuan, combined with rising prices. The Chinese currency has performed very well against all other major currencies thanks to a rebound in the demand for Chinese goods after a Covid-related lull at the beginning of 2020 and this means that these cities are now more expensive for overseas travellers and workers compared to previously.”

Meanwhile, Japanese locations have all dropped in the latest ranking after a tough year for the yen. Along with Tokyo dropping in the rankings, Yokohama (16th) has fallen out of the global top ten.

Kilfedder explained “The Japanese economy has experienced a challenging period of late and the yen has fallen against all major currencies, making the country cheaper for overseas workers and visitors. This is despite Japan seeing a rare rise in prices thanks in part to more expensive imports, particularly oil. The weaker yen has outweighed any price rises, which has resulted in Japanese cities becoming a little cheaper compared to some other major global locations.”

Global top 20 most expensive locations for expatriates

Location	Country	2021 Ranking	2020 Ranking
Hong Kong	Hong Kong	1	1
Geneva	Switzerland	2	4
Tokyo	Japan	3	2
New York	USA	4	3
Tel Aviv	Israel	5	7
London	United Kingdom	6	6
Zurich	Switzerland	7	5
Seoul	Korea Republic	8	8
Shanghai	China	9	11
Guangzhou	China	10	15
Shenzhen	China	11	17
Singapore	Singapore	12	14
San Francisco	USA	13	9
Jerusalem	Israel	14	16
Beijing	China	15	18
Yokohama	Japan	16	10
Bern	Switzerland	17	13
Copenhagen	Denmark	18	12
Taipei	Taiwan	19	25
Port Moresby	Papua New Guinea	20	20

Notes to Editors

About ECA's Cost of Living Ranking

ECA International's cost of living rankings combine ECA’s Cost of Living research and Accommodation research to enable a comparison of costs faced by expatriates around the world in 208 cities in 121 countries and territories. 

This comparison of cost of living is calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons and different levels of shopping efficiency.

ECA’s Cost of Living research

ECA International’s cost of living research is carried out in March and September using a basket of day-to-day goods and services commonly purchased by assignees. The data used above refers to the September 2021 data collection period with changes compared to the September 2020 period. ECA’s Cost of Living rankings began in 2005.

Cost of living indices are used by ECA clients to calculate cost of living allowances for assignees.  The research covers:

• Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables 
• Basic: Household goods; recreational goods; general services; leisure services
• General: Clothing; electrical goods; motoring; meals out; alcohol and tobacco
• Utilities costs
• Public transport

ECA’s Accommodation research

This ranking uses data from ECA's 2021 Accommodation reports. The reports have been published annually since 1996.

The reports provide comprehensive and reliable information for locations worldwide on the rental trends, types of accommodation and districts commonly sought by expatriates. To ensure impartiality and to maintain the accuracy of information, data from a number of sources is used to compile each accommodation report. ECA uses a global network of estate agents, relocation agents and extensive in-house research into worldwide property markets to establish and verify the housing data in the reports. 

About ECA International 

ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.  

Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.

We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.

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