Mercer Cost of Living Survey – Worldwide Rankings, 2009 (including rental accommodation costs) The indices are based on Mercer's cost of living database and are modified to include rental accommodation costs and to reflect constant weighting and basket items. We do not recommend that expatriates use the figures represented here to compare their own compensation packages.
Rankings		City	Country	COL Index
March 2009	March 2008			March 2009	March 2008
1	2	Tokyo	Japan	143.7	127
2	11	Osaka	Japan	119.2	110
3	1	Moscow	Russia	115.4	142.4
4	8	Geneva	Switzerland	109.2	115.8
5	6	Hong Kong	Hong Kong	108.7	117.6
6	9	Zurich	Switzerland	105.2	112.7
7	7	Copenhagen	Denmark	105.0	117.2
8	22	New York City	US	100.0	100.0
9	20	Beijing	China	99.6	101.9
10	13	Singapore	Singapore	98.0	109.1
134	133	Tunis	Tunisia	58.4	64.4
135	117	Chennai (Madras)	India	57.7	69.3
136	142	Quito	Ecuador	56.3	54.6
137	108	Mexico City	Mexico	55.5	73.6
138	78	Auckland	New Zealand	54.0	81
139	93	Wellington	New Zealand	52.3	77.6
140	141	Karachi	Pakistan	50.7	54.7
141	143	Asuncion	Paraguay	49.9	52.5
142	131	Monterrey	Mexico	49.8	65.8
143	140	Johannesburg	South Africa	49.6	60.4

Based on over 200 goods and services, the Mercer semi-annual surveys are conducted by professional researchers simultaneously in each of the 290 locations covered. Carefully chosen vendors reflect only those outlets where your expatriates can buy goods and services of international quality.

Kuala Lumpur gets a 96th ranking, compared with 106th in 2008 - - The survey relates to costs for expatriates but in Asia for example, food costs in restaurants patronised by locals are usually inexpensive compared with prices in areas frequented by tourists. Ceiling fans compared with air conditioning can eliminate a tax of 5% in Malaysia! The cost of a 4-dish meal for two, excluding beverages, at the Good World Chinese restaurant in Dublin, would cost about €75 ($112) - in Malaysia, the cost for an equivalent meal including steamed fresh fish, would cost €12 ($19).

Mercer says for the most part, the fluctuations have been the result of important currency fluctuations and less so by price movements.

Price movements

Up until September and October 2008, we observed a substantial increase in prices of basic consumption items and energy in many parts of the world. In the last few months of 2008, there was a sharp reversal of this trend which continued into the early part of 2009. The March 2009 Cost of Living survey revealed a substantial decrease in petrol prices and a stabilisation of prices for many basic items in most of the locations. Inflation as measured by Mercer’s cost of living surveys shows relatively low levels of inflation globally.

The global economic downturn has dramatically changed many real estate markets. Some residential rental markets have been impacted by the credit crisis causing prices to decrease. Markets show signs of weakening as a result of increasing supply. The stock of properties for rent has increased as many new developments are difficult to sell and property owners decide to rent. Another reason for falling prices is rising unemployment and its consequence is decreasing demand.

On the other hand some markets react in the opposite way, because it is more difficult to get mortgage to buy property, people prefer to rent causing rising demand and as a result increasing prices.

Currency movements

The period from March 2008 to March 2009 was characterised by important currency fluctuations; in particular the US dollar strengthened against a number of currencies worldwide while the Euro weakened to the US dollar. The Euro has lost almost 13% against the US dollar and to currencies pegged to the US dollar. During the same period, the British pound has lost more than 26% against the US dollar.

Consequences of the currency movements on the expatriate compensation

Currency movements have a direct impact on the Cost of Living index. To illustrate this point, consider a transfer from Washington DC to London. In March 2008 the Cost of Living index Mean to Mean index was 140 (with Washington DC as 100). In March 2009, following the loss in value of the British pound to the US dollar, the Cost of living index dropped to 103 to reflect the increase in purchasing power of the USD in GBP terms (in the timeframe from March 2008 to March 2009, the USD has gained 35.9% against the GBP).

However, the important point is that for the assignee in London, despite this tremendous drop in the COL index, there was NO decrease in the combined spendable income and cost of living allowance in GBP terms. In other words, the same spendable income in USD adjusted by the new lower COL index and converted at the new exchange rate gives the stable host purchasing part as shown in the table below.

Transfer Washington DC to London - illustration of the impact of the Cost of Living index and host purchasing of goods and services

Dates	Annual Gross Base salary (USD)	Spendable Income Net (USD)	COL Index Mean to Mean	Exchange rate USD 1 = GBP	Exchange rate variation (%)	Spendable Income adjuster by COLA (USD)	Spendable Income adjusted by COLA & exchange rate (GBP)
March 2008	80,000	26,000	140	0.509485		36,960	18,831
March 2009	80,000	26,000	103	0.692490	35.9%	27,192	18,830

Mercer says it is important to note that if the employee is not paid in home country currency, but is paid instead in GBP the assignee can suffer an important drop in savings in home country currency terms, normally these loses should be reconciled.

Top 5 cost of living ranking for cities worldwide

Top 5 cities - Overall

Tokyo, Japan (1st) Osaka, Japan (2nd) Moscow, Russia (3rd ) Geneva, Switzerland (4th) Hong Kong, Hong Kong (5th)

Top 5 cost of living ranking cities by region

Top 5 cities - Americas	Top 5 cities - Asia Pacific	Top 5 cities - Europe	Top 5 cities - Middle East & Africa
New York City, US (8th) Caracas, Venezuela (15th) Los Angeles, US (23rd) White Plains (31st) San Francisco, US (34th) The lowest ranking Americas city in the top 50 is Chicago (50th).	Tokyo, Japan (1st) Osaka, Japan (2nd) Hong Kong, Hong Kong (5th) Beijing, China (9th) Singapore. (10th) The lowest ranking Asian city in the top 50 is Guangzhou (23rd).	Moscow, Russia (3rd) Geneva, Switzerland (4th) Zürich, Switzerland (6th) Copenhagen, Denmark (7th) Milan, Ity (11th) The lowest ranking European city in the top 50 is Berlin (49th).	Tel Aviv, Israël (17th) Dubai, UAE (20th) Abu Dhabi, UAE (26th) Douala, Cameroon (27th) Lagos, Nigeria (32nd) The lowest ranking Middle Eastern or African city in the top 50 is Beirut (41st)

Cost of living comparisons in €s – 2008

Selected cities worldwide: 1 Euro= US$1.57

(NB purchases at medium-priced establishments) 

 

 

   

Source: Mercer – Cost of Living Survey 2008

Expatriate rental property costs – Mercer global survey and city rankings

• Asian cities dominate the top 10 most expensive cities for expats

• Currency fluctuations cause significant changes in rankings

• London, Singapore and Hong Kong have already experienced a strong decline in rental prices

• Singapore drops a spot but maintains top 10 ranking while other ASEAN cities climb up rankings

APRIL 2009: Asian cities dominate the world’s top 10 costliest locations for expatriate rental property, according to a study by Mercer of housing costs and practices for employees sent on overseas assignments. Outside Asia, New York, Geneva and London also appear near the top of the ranking while Moscow holds the number one position.

From a survey of 300 cities across the world Mercer has produced a rental property index of the 50 most popular cities for expatriate assignments. The research provides multinational companies with financial information on rental prices for their expatriate employees in major commercial centers.  Data is based on typical rents for 1-4 bedroom apartments and 3-4 bedroom houses, furnished and unfurnished.

New York is used as the base city, with a score of 100 points. Moscow at the top of the ranking scores 168.30 while Johannesburg, at position 50, is substantially less costly with a score of 31.50. As the index is based on cost comparisons using the US dollar, currency exchange rates have an influence on the rankings.

Marie-Laurence Sépède, senior associate and research manager at Mercer, commented, “The world’s housing markets have been sliding since 2008, and strong currency fluctuations in the past few months have also had a strong impact on the comparative cost of expatriate housing. The value of the Euro has dropped by around 12 percent against the US dollar since September last year, while the Polish zloty, Mexican peso, Australian dollar, Brazilian real and the British pound have all lost more than 30 percent in value against the dollar during the same period.

ASEAN

Singapore maintains its top 10 ranking among the world’s most expensive cities for expatriate housing, but drops one place to 10th due to weakening demand. ASEAN cities have become relatively more expensive compared to the rest of the world with Jakarta, Kuala Lumpur, Manila and Bangkok all climbing up the rankings. Jakarta rises seven places from 41st to 34th, Manila moves up five places from 45th to 40th, Bangkok climbs four places from 48th to 44th and Kuala Lumpur picks up one position to 36th. Puneet Swani, Mercer’s Head of Information Product Solutions for ASEAN commented: “Higher rankings do not necessarily indicate that property prices have increased. Apart from Singapore, rental prices in most ASEAN cities have in fact remained the same or decreased marginally. They remain comparatively stable compared to sharp falls in American and European cities, which accounts for the relatively higher rankings of ASEAN cities this year. Singapore’s drop in ranking is a reflection of a strong decline in property prices, hardest hit in the ASEAN region by the current economic crisis.”

“Despite falling property rental costs in most of ASEAN, the difficult economic situation will still likely result in an overall decrease in expatriate assignments across the region. That said, ASEAN as a region continues to grow and remains a relatively good area for multinationals to invest and grow their business during this downturn.”

 Swani added: “It will be interesting to see what 2010 brings for the housing market in ASEAN, but if current conditions are any indication, we may see Singapore continue to move down, with other ASEAN countries either maintaining the same position or moving up marginally in ranking”.

Asia Pacific

Asia dominates the top 10 most expensive cities for expatriate properties. Tokyo (156.10) is the second most expensive rental city for expatriates globally – up from 3rd place in 2008 due to an appreciation of around 17 percent in the value of the yen against the dollar since September 2008. Hong Kong moved down one place to third position (142.10) due to rental prices decreasing as a result of reduced demand from the economic slowdown. Besides ASEAN, Asian cities moving up the ranking table include Beijing, which moved up four positions to 6th place (98.30) with its rental prices stable and its currency linked to the US dollar.  Mumbai at position 4 (105.10), New Delhi at 8 (96.60) and Bangalore at 29 (51.80) continue to receive interest and demand for expatriate rental property.

Other cities in the region have experienced notable changes in the ranking for a number of reasons: their currency is linked to the US dollar or the prices for expatriate rentals are quoted in US dollars, and there is an oversupply of accommodation. In Vietnam, Ho Chi Minh City is up 11 places to 23rd position (55.10). Seoul at position 16 (73.30) has dropped five places with a devaluation of the Korean won by nearly 30 percent, while Jakarta is up 7 positions to 34 (score 49.50).

Sydney is still the most expensive city for rental property in Australia but it has dropped seven places to 32nd position (49.70) with the Australian dollar experiencing a loss of around 30 percent against the US dollar.

Europe

Moscow (score 168.30) is ranked the most expensive city for rental prices in Europe and globally for 2008. London has moved down five places and is now in 9th position, scoring 95.60 and is the third highest ranking European city after Geneva which scores 96.80. As well as the British pound’s decline in value against the US dollar, London residential rents are now falling as the supply of rental property increases.

Other European cities in the top 20 include Paris in 13th place (77.20), Kiev at 14 (75.50), Milan at 15 (75.40) and Copenhagen at 20 (61.10). Warsaw has dropped 13 places to position 31 (score 50.80), driven the zloty’s strong devaluation against the dollar.

Middle East and Africa

Dubai has the most expensive rental prices in the Middle East, in 12th place with a stable score of 82.50 over the last six months. The United Arab Emirates dirham is pegged to the US dollar, and the real estate market, though facing some difficulties, has not yet experienced a major fall in rental prices. However, this is expected to happen in the coming months as the global economic crisis impacts this region.

Jeddah in Saudi Arabia is ranked 47(37.80) and has moved up three places since September 2008. Cairo has moved up seven places to position 37(47.00). Johannesburg is ranked 50 (31.50) with about 30 percent of the rand’s value lost against the dollar in the last few months.

The Americas

In the United States the rental market within some cities is resilient and rental prices across the country are increasing. New York City in 5th position has moved up 2 places (100.00) while Los Angeles ranks 17th place (score 72.60).

“The growing number of foreclosures is forcing more people to look for apartments and houses to rent. However, we expect rental prices to decrease as unemployment and other economic factors begin to influence the market,” Sépède commented.

Most cities in South America have dropped in the ranking with Sao Paulo moving from 16th to 27th place (53.40) and Rio de Janeiro moving from 20th to 35th place (49.40), impacted by the near 50 percent devaluation of the Brazilian real against the US dollar. Caracas (68.00), ranked 18th, is now the most expensive city in the region followed by Bogota in 22nd position (58.00), while Mexico City in 49th position (score 37.50) has dropped 11 places since 2008. Buenos Aires is up from 47 to 42nd place (score 42.00).

“In recent months, much of the movement in the rankings can be attributed to currency fluctuations. Looking ahead over the next few months, we would expect to see a general decline in rental prices due to the economic slowdown. Multinational companies should closely monitor these changes in the markets so as not to lose out on opportunities for cost savings,” commented. Sépède.

The figures for Mercer’s housing for expatriates were compiled in late October 2008 using September 2008 exchange rates and then compared with later exchange rates in February 2009.

Finfacts Report April 2009: Dublin ranks 25th of 215 in Mercer’s 2009 Quality of Living Global City rankings; Vienna scores highest - - Baghdad the lowest

March 2008: Dublin fourth most expensive city of 71 global cites - Kuala Lumpur cheapest according to UBS report

Dec 2007: World Bank study says 12 economies account for more than two-thirds of world’s output; Chinese economy size cut by 40%; Ireland is fourth most expensive world economy

Global Income per Capita Report by Country