The cost of living....

[Gob]

Sydney rockets up the list of the world’s most expensive cities

Sydney is now among the top 20 most expensive cities worldwide according to ECA International, the world’s leader in the development and provision of solutions for the management and assignment of employees around the world.

Food price increases of 5.2% in Sydney coupled with the impact of the strong Australian dollar have seen the city shoot up ECA’s ranking looking at cost of living around the world for international assignees. Sydney is now more expensive for international assignees than Paris, Manhattan and Hong Kong as well as London. A year ago, goods and services in Sydney were 3% more expensive than when purchased in Hong Kong. Now they are 17% more costly.

"The strong Australian dollar which hit parity with the US dollar last November, and has strengthened further since, has been a significant factor behind the continued rise of Australian locations up the global ranking," said Anna Michielsen, General Manager, Australia, New Zealand & Pacific for ECA International.

"While price increases have impacted on the purchasing power of Australians at home, international assignees coming into the country have seen their purchasing power affected by the stronger Australian dollar. For businesses, the progressively stronger dollar means that companies sending people to Australia from many locations will need to continue to pay or even increase allowances in order for employees to maintain their purchasing power while on assignment. Conversely, many locations previously considered expensive for international assignees moving overseas from Australia now seem surprisingly reasonable in terms of cost of living."

Sydney has overtaken Canberra, which has jumped from 26th to 18th position year-on-year, as the most expensive Australian city. Sydney and Canberra are followed by Brisbane (21st), Melbourne (25th), Perth (26th) and Adelaide (28th) - all these major Australian cities are now in the global top 30.

Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out a Cost of Living Survey twice a year comparing a basket of consumer goods and services commonly purchased by assignees in 400 locations worldwide.

The Norwegian capital Oslo remains the most expensive location surveyed in Europe and the 2nd most expensive globally. It is followed by Stavanger (4th globally) and the Swiss city Zurich (6th).

Of the European locations surveyed cost of living has increased the most in Swiss locations. In Switzerland, where inflation is low, it is the strong Swiss franc that has contributed to pushing Zurich up to 6th position globally from 10th.

With the weakening of the euro against major currencies between surveys, many eurozone locations have fallen down the ranking significantly. A year ago goods and services commonly purchased by expatriates were almost 9% more expensive in Paris than in Sydney. Now the same items are 5% more expensive when bought in Sydney than in the French capital largely due to the euro depreciating against the Australian dollar.

"On-going economic troubles in the eurozone region have affected the single currency," says Anna Michielsen. "As a result many locations where the Euro is used have dropped down the rankings. This continues the trend we have seen in recent surveys, whereby more and more companies are introducing or increasing cost of living allowances when assigning staff from Europe to Asia Pacific."

Caracas (15th) is the most expensive location in the region for international assignees - a result of rampant inflation. The Venezuelan capital is followed by Brazilian locations Rio de Janeiro (23rd) and Sao Paolo (27th).

In North America, Vancouver (37th) is the most expensive location for assignees, followed by Ottawa (40th), Toronto (42nd) and Manhattan (44th).

Luanda, Angola, ranked 7th globally, is the most expensive location for international assignees in Africa followed by Libreville (Gabon, 19th) and Kinshasa (Democratic Republic of Congo, 24th). While these locations are among some of the most expensive surveyed, Africa is also home to some of the least expensive locations, with Maseru (Lesotho), Alexandria (Egypt) and Durban (South Africa) ranked 237th, 235th and 225th respectively.

In the Middle East, Tel Aviv, ranked 29th globally is the most expensive location surveyed while Dubai is 175th. Jeddah, 234th is the least expensive

About ECA’s Cost of Living Survey
ECA International’s cost of living indices are calculated based upon surveys carried out annually in March and September using a basket of day-to-day goods and services. The data used above refers to year on year movements between ECA’s March 2011 and 2010 surveys.

The data is used by ECA clients to calculate cost of living allowances for assignees. The survey covers:
Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
Basic: Drink and tobacco; miscellaneous goods; services
General: Clothing; electrical goods; motoring; meals out

Certain living costs such as accommodation, utilities (electricity, gas, water costs), car purchase and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.

This comparison of cost of living was 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.

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[Scooter]

Not sure what criteria they are using, but no way is Ottawa more expensive than Toronto by any rational standard.

[The Hen]

Hell, I can't even accept that Sydney is cheaper than Canberra.

[dgs49]

Just to be clear - this is not something to be happy or boastful about. The only good thing about living in a high cost-of-living area is that you might be able to cash-in and LEAVE.

How ironic it is that so much of the Western world is fretting about dropping real estate values - which actually makes home ownership more affordable - especially with today's incredible interest rates.

[Gob]

Fair comment Dave. Hen and I hope to retire to a cheap place in the country, and live off the proceeds of selling up in Canberra and Cornwall. If things work out, we should be able to retire early.

[oldr_n_wsr]

Not sure what criteria they are using, but no way is Ottawa more expensive than Toronto by any rational standard.

Way back in 2007 (2008?) I was in Toronto and a double Jack ont eh rocks was over $20. It was in the hotel bar and I expected it to be priced higher than normal, but at any bar here on Long Island it would have only been around $10-$12.

[Scooter]

That sounds high to me as well, although since I live here I don't often frequent hotels. I don't think a double in a bar would be more than $14.