The cost of living in the U.S. is always a concern for advisors and their clients, but for those working abroad, expenses can loom even larger in day-to-day life, according to a new survey.
Americans living and working abroad may find that living expenses are even higher in some cities in Asia, Europe and Africa, according to the 24th annual Cost of Living Survey by the management consulting and research firm Mercer.
Four out of five of the world’s most expensive cities for expatriates are now in Asia; none of the top 10 cities are in the United States, nor anywhere else in North or South America.
Mercer says its survey is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City living expenses are used as the baseline for the ranking, and currency movements are measured against the U.S. dollar. The survey includes over 375 cities throughout the world and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.
"While a mobile workforce allows organizations to achieve greater efficiency, utilize top talent, and be cost effective with international projects, volatile markets and slowing economic growth in many parts of the world require them to carefully assess expatriate remuneration packages," said Ilya Bonic, president of Mercer’s Career business.
The report noted that U.S. cities dropped in the ranking this year because of gains in the European economy that contributed to a decline in the U.S. dollar against other major currencies. New York City, for example, dropped out of the top 10 list, going from No. 9 to No. 13. The city was followed by San Francisco (28) and Los Angeles (35). Portland, Ore., (130) and Winston Salem, N.C., (161) remain the least expensive U.S. cities of those surveyed.
Most cities in Europe, meanwhile, rose in the rankings—particularly in Germany, where Frankfurt (68), Berlin (71) and Munich (57) each rose more than 40 places on the list, according to Mercer.
The following cities, in ascending order, have the highest cost of living, according to Mercer:
10. Bern, Switzerland
The city is the second-most expensive city in Europe, in a country that is considered one of the most expensive in the world.
9. Beijing
Although it remains one of the world's most expensive cities, Beijing has seen a 34 percent decrease in its cost of living index since 1998, according to Mercer.
8. N'Djamena, Chad
It was the second-most expensive city in Africa of those surveyed. It rose seven places on the cost-of-living ranking since last year.
7. Shanghai
"Stronger Chinese monetary regulation, a flourishing economy and a push to have the Chinese yuan as an international currency pushed Chinese cities up in the ranking," said Yvonne Traber, Global Mobility Product Solutions leader at Mercer.
6. Luanda, Angola
This city topped the entire list last year. Despite dropping down, it remains the most expensive city in Africa, Mercer said.
5. Seoul, South Korea
If you're a coffee drinker, this city will cost you more than anyplace in the world, with an average of more than $10 per cup (including service).
4. Singapore
The city moved up in the list one spot.
3. Zurich
The city was found to be the most expensive place for expats in all of Europe. As one example, a fast food hamburger in this city costs more than $13, according to Mercer.
2. Tokyo
Although home to the world's second-most expensive city, "significant surges in other locations worldwide caused Japanese cities, Osaka and Nagoya in particular, to fall in this year’s ranking,” Traber said.
1. Hong Kong
The city moved up one spot to capture the title of most expensive city. It also was on top of the list for gas costs, with an average price of about two dollars per liter.
