Another Top-10 List — Most Expensive Cities in the World

I truly believe that everyone needs to live outside of the U.S. for a period of time as it can change your entire perspective. It will make you both appreciate what you have and the cost of some goods and services and question why others are so expensive – if even available.

My wife, 13 month old daughter and self (in 1980) moved to New Zealand where I was a lecturer at the Lincoln College of the University of Canterbury. I wrote and taught their new program on the appraisal side of a Bachelor’s of Commerce Degree in Valuation and Property Management. The school is now Lincoln University. What a great experience. Our youngest daughter was born there – a Kiwi. A great friend’s son in Houston will graduate from the University of Canterbury this coming June. It’s a very small world indeed.

Some things were really affordable in New Zealand at that time. Our 3-bedroom 1-bath house was $27 per week. No kidding. One-half a lamb at the Lincoln Village butcher shop was often on sale for $5.95 (and I grew up on a sheep ranch in Colorado). We were able to purchase fish and chips (fresh flounder) in 1980 for 96 cents New Zealand, when $1 US got you $1.05 local currency. By the way, they never had tartar sauce but used Worcestershire sauce on the fried fish – which I still do today. Excellent. Give it a try.

Some things were much more expensive. A liter of gasoline in 1980 was $NZ 0.99, or around $US 0.94. At that time gasoline average cost in the U.S. was $US 1.19 per gallon or $US 0.31 per liter. Thus gasoline cost more than three times in New Zealand than the U.S. Some of this was due to taxes (and other government policies) and also to the interaction of supply and demand. New Zealand had no proven hydrocarbons in 1980 resulting in all oil and gas products being imported and expensive.

Compared to many cities and countries, however, most of the U.S. and New Zealand are highly affordable. Affordability is highly variable within specific countries, so country-to-county comparisons can be misleading.

Fortunately, The Economist publishes a World Cost of Living Study twice annually that ranks comparative cost of living for 132 cities around the globe. The Economist Intelligence Unit Survey compares more than 400 individual prices across 160 products and services. They contrast costs at supermarkets, mid-priced stores and higher-priced specialty outlets. Prices are what people pay for these goods and services and are not the recommended retail prices or manufacturers’ costs. Goods and services in the study include:

• Food
• Drink
• Clothing
• Household Supplies
• Personal Care Items
• Home Rents
• Transport
• Utility Bills
• Private Schools
• Recreational Costs

Once gathered, prices are converted into $US as a central currency for comparison.

So where are the most expensive places now to live in the world based on the Economist Intelligence Unit’s Semi-Annual Worldwide Cost of Living Survey? The following table includes three items for general comparison and context purposes – a loaf of bread, bottle of wine and a liter of gas — even though the study focused on 160 products and services per city. The last column in the table shows each locale in comparison to New York City, which received a 100 Index Score.

 

world 1

 

Some interesting items within The Economist Study included:

 

  • Currently living in Paris is 7 percent more expensive than NYC, but just five years ago it was 50 percent greater — vividly illustrating what foreign currency exchange fluctuations can do to costs
  • It costs almost twice as much to fill a grocery cart in Seoul than NYC
  • Seoul, Tokyo and Osaka are the most expensive places in the world to purchase staple goods (frequently purchased and routinely consumed ranging from bread, milk and eggs to paper)
  • Even though Singapore is the world’s most expensive city, the cost of personal care, household goods and domestic help are “significantly cheaper than its peers,” but remains the most expensive place of the top-ranked cities to run a car and second most expensive to purchase clothes
  • The global average cost of living in these 132 cities has fallen from 93.5 percent when compared to New York City in 2012 to 74 percent today – again exchange rate issues by-in-large

 

 

To read the entire article click here.

 

To learn more about the World Cost of Living Study click here.  Non-subscribers can view a specific city-to-city cost comparison on a pay-per-view basis.

 

Things Change.   Today a liter of regular gasoline (petrol) in New Zealand is $NZ  2.06 or $US 1.42 (which equates to $US 5.38 per gallon).   Gasoline remains expensive in NZ when contrasted to the U.S., so that has not changed.   Recall that in 1980 we rented a three-bedroom, one-bath home for $27 per week.  My friend’s son that is going to graduate from the University of Canterbury in June rents one bedroom in a house with kitchen privileges for $NZ 700 per month today.  Again it’s all about supply and demand, with supply having contracted severely following the 6.3 magnitude earthquake in 2011.

 

Just reading this study on the Global Cost of Living made me appreciate Houston, Texas even more.

 

Ted

 

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