Leaving one’s home country and moving to a completely different city for work is not an easy decision. There are many factors to consider, with cost undoubtedly being one of the primary ones. For foreign nationals, which international city has the highest cost of living in the world?
On Monday, June 17, the human resources consulting firm Mercer released the “2024 Global Cost of Living Rankings,” with Hong Kong once again topping the list as the most expensive city for international employees to live in. Switzerland had four cities among the top ten most expensive cities for international employees.
Mercer stated that in recent years, several key factors have impacted the world economy. These factors include increased economic and geopolitical volatility, as well as local conflicts and emergencies leading to additional expenditures in housing, utilities, local taxes, and education. By 2024, these factors will continue to influence the cost of living in major cities. Currency inflation and exchange rate fluctuations directly affect the wages and savings of international mobile employees (or those on international assignments).
Mercer’s annual cost of living city rankings provide trend insights and perspectives for those making decisions regarding global mobility operations and international assignments. The report surveyed 226 cities, comparing the costs of over two hundred items in each city, including transportation, food, clothing, household goods, and entertainment.
For cities ranking higher, expensive housing markets, high transportation costs, and higher costs for goods and services all contribute to the high cost of living. Conversely, in Islamabad, Turkey, Lagos and Abuja in Nigeria, the cost of living for international assignees is significantly lower, partly due to currency depreciation.
Among the top 10, Swiss cities Zurich, Geneva, Basel, and Bern ranked third, fourth, fifth, and sixth respectively.
Seven American cities made it into the top 20, with New York being the most expensive city to live in the United States, ranking seventh, while London, which was at 17th place last year, jumped to eighth. The Bahamas came in ninth, Los Angeles tenth, Honolulu twelfth, and San Francisco thirteenth.
Singapore ranked second.
Sydney is the most expensive place in the Pacific region (58th place), while Auckland and Wellington in New Zealand remain the lowest cost cities in the Pacific region, ranking 111th and 145th respectively.
Toronto is the most expensive city in Canada (92nd place), followed by Vancouver at 101st place.
Mumbai is the most expensive city in India (136th place).
“Housing costs are a major factor in the cost of living city rankings,” the research report points out that employees who spend a large portion of their income on rent or mortgage will “reduce disposable income for other expenses.”
“During the period from 2023 to 2024, housing costs fluctuated significantly worldwide, with large differences in housing rental prices across cities,” the report stated.
Yvonne Traber, Global Mobility Leader at Mercer, stated in a press release, “The issue of cost of living has a significant impact on multinational organizations and their employees.”
“High cost of living could lead assignees to adjust their lifestyles, cut discretionary spending, or even struggle to meet basic needs,” Traber said, “To address these issues, employers can provide compensation packages including housing subsidies or other support services.”
Below are the top 20 cities with the highest cost of living for foreign nationals:
1. Hong Kong
2. Singapore
3. Zurich, Switzerland
4. Geneva, Switzerland
5. Basel, Switzerland
6. Bern, Switzerland
7. New York, USA
8. London, UK
9. Nassau, The Bahamas
10. Los Angeles, USA
11. Copenhagen, Denmark
12. Honolulu, USA
13. San Francisco, USA
14. Bangui, Central African Republic
15. Dubai, United Arab Emirates
16. Tel Aviv, Israel
17. Miami, USA
18. Djibouti
19. Boston, USA
20. Chicago, USA