New York now world's costliest city for expats

New York has replaced Hong Kong as the most expensive city in the world for expats to live in, according to this year's global survey by ECA International.

David Sapsted

12 June 2023

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Hong Kong topped the data, software and global mobility company's Cost of Living Rankings over the previous four years. But, the strength of the dollar in 2023, along with high inflation and rental price increases, saw the Big Apple move to No 1 in the survey of 207 cities in 120 countries and territories.

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Most expensive places to live in Europe

Third-placed Geneva remains the most expensive location in Europe for expatriates, followed by London in fourth place, although other UK cities dropped down the table this year with Birmingham (115th), Cardiff (118th) and Belfast (123rd) all falling outside the top 100.Steven Kilfedder, head of production at ECA International, said: “The cost of living crisis in the UK persists, with rising costs driven primarily by food, utilities, and housing prices."Despite these challenges, all UK cities bar London have experienced a decline in the global ranking. This can largely be attributed to the weakness of the pound, which has made the country cheaper for people coming to the UK from other countries.”ECA, which has been researching the cost of living globally for 50 years, bases its finding on factors such as the cost of accommodation, food, public utilities, entertaining and services commonly purchased by assignees.

The impact of exceptional circumstances

Aside from global inflation, the past year has seen one exceptional circumstance that has affected expat costs in many countries: the impact of the Russian invasion of Ukraine."Accommodation costs in locations where many Ukrainian refugees have fled the war have surged, making these cities more expensive for everyone including expatriates," said ECA."Polish cities have seen the biggest impact, with colossal rises in rental prices of between 25 and 50 per cent, which have pushed Krakow up 23 places in the global rankings to 178th and Warsaw up 11 places to 158th."The same scenario has happened for Russians fleeing to cities such as Dubai, Yerevan, Nicosia and Tbilisi, in order to avoid possible mobilisation as a result of the war. Rents in Dubai, UAE, rose by almost a third, pushing the city up to 12th in the global rankings, while rents also rose by more than a fifth in Tbilisi, Georgia - as supply could not rise to meet the increased demand from Russian expatriates."However, the biggest riser in this year’s rankings is Istanbul, which has gone up 95 places to 108th "due to a myriad of factors".Mr Kilfedder said: “While the city has been impacted by the war in Ukraine, the main reason behind prices increasing by over 80 per cent is the economic policies of the recently re-elected President Erdogan. Rents have also gone up partly due to increased demand from displaced Turkish nationals after February’s earthquake.”

Inflation weighs on Europe

In Europe as a whole, just over half of cities - and almost two-thirds in the eurozone - have moved up the index, primarily as a result of inflation.However, in Scandinavia, Oslo, Stavanger, Stockholm and Gothenburg fell down the table. "Our Cost of Living rankings are affected by two factors: prices and exchange rates," said Mr Kilfedder."Even when prices are rising quickly as they are in much of Europe, a city can become comparatively cheaper for visitors if the currency is weaker. This is the case for Norwegian and Swedish cities, where the inflation rates peaked at around ten per cent, but their rankings have plummeted by an average of 10 places due to the weakening of their respective currencies."On the other hand, the strength of the dollar pushed up the rankings for all US cities this year, though the biggest riser across North America has been Mexico City, which has risen to 92nd because of the strength of the peso and high inflation.Meanwhile in Asia, ECA reported: "Hong Kong’s fall in the ranking was matched by nearly all major locations in the region. Singapore, Seoul and Yangon were among the exceptions, with Singapore having leapt up into the top five most expensive cities in the world, up from 13th position in 2022."Contrary to last year, Chinese cities have dropped further down in the ranking due to the weaker Chinese yuan against other currencies and a lower rate of inflation compared to other countries."

Global top 20 (2022 ranking in brackets)

1. New York (2)2. Hong Kong (1)3. Geneva (3)4. London (4)5. Singapore (13)6. Zurich (7)7. San Francisco (11)8. Tel Aviv (6)9. Seoul (10)10. Tokyo (5)11. Bern (16)12. Dubai (23)13. Shanghai (8)14. Guangzhou (9)15. Los Angeles (21)16. Shenzhen (12)17. Beijing (14)18. Copenhagen (18)19. Abu Dhabi (22)20. Chicago (25)

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