2018 Cost of Living Ranking

2018 Cost of Living Ranking

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Mercer’s 24th annual Cost of Living Survey reveals Luanda remains the highest-ranking city in Africa

  • 26 June 2018
  • South Africa , Johannesburg

Multinationals prepare for the Future of Work with focus on mobile talent

Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), has released the results of its 24th Cost of Living survey, ranking cities around the world. According to the report, two South African cities, Cape Town and Johannesburg have gone up in their ranking from 199 to 170 and from 191 to 177 respectively.

Key African findings

Despite dropping off the top spot on the global list, Luanda, Angola (6) remains the highest-ranking city in Africa. This drop has been primarily because of the downward trend in the housing market and the depreciation of the local currency to the USD, making it more attractive for foreign investments and also cheaper for foreigners to live in. N’Djamena (8) follows, rising seven places. Moving up fourteen spots, Libreville (18) is the next African city on the list, followed by Brazzaville, Congo (19), which moved up eleven places.

As compared to last year’s report, some African countries like Cape Town in South Africa and Tunis in Tunisia have seen a noticeable increase in accommodation related rentals. Whereas the opposite has been recorded for Cairo, Egypt where the rental value, especially for houses have dropped.

“Using expatriates, especially for highly skilled operational positions or executive positions roles is still prevalent practice among Multinationals that are investing in the continent,” said Nicolaas Janse van Rensburg, Senior Mobility Consultant at Mercer. “For example, if it is a relatively new organisation that is starting its operation in the continent, they tend to bring talent from the head office. This is primarily because specialised skills are not yet locally available.”

“Multinationals cannot approach their expatriate packages for Africa with one broad brush stroke. For example, Luanda in Angola has been listed as the 6th most expensive city in the world, whereas Windhoek in neighbouring Namibia comes in at the 196th position in terms of cost of living, highlighting that each African country has its own unique economy,” continues Nicolaas.

Mercer's widely recognised survey is one of the world’s most comprehensive and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar. The survey includes over 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

“Multinationals need to let go of their misconception that the African market is extremely volatile.  It is just not in Africa where varying Cost of Living differentials are evident the report findings highlights that the cost of living in even developed economies are always fluctuating due to a multitude of reasons ranging from currency fluctuations to housing costs,” concludes Nicolaas.

Global ranking

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (5), Luanda (6), Shanghai (7), N’Djamena (8), Beijing (9), and Bern (10). The world’s least expensive cities for expatriates are Tashkent (209), Tunis (208), and Bishkek (207). Due to the strengthening of the local currencies to the US Dollar, N'djamena (Chad) and Bejing (China) are the two new additions to the list of top 10 cities.

According to the report, factors like instability of housing markets, low inflation and fluctuating prices for goods and services are impacting the cost of doing business in various countries in the continent. Multinationals are embracing this transformation by focusing on mobile talent and assessing the cost of expatriate packages for the international assignees.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit www.mercer.com/col. To purchase copies of individual city reports, visit https://mobilityexchange.mercer.com/cost-of-living-rankings or call Mercer Client Services in Warsaw on +48 22 434 5383.

Notes for editors

The list of rankings is provided to journalists for reference and should not be published in full. The top 10 and bottom 10 cities may be reproduced in a table.

The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2018. Exchange rates from that time and Mercer’s international basket of goods and services from its Cost of Living survey have been used as base measurements.

Governments and major companies use data from this survey to protect the purchasing power of their employees when transferred abroad; rental accommodation costs data is used to assess local expatriate housing allowances. The choice of cities surveyed is based on the demand for data.

About Mercer

Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 22,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With nearly 65,000 colleagues and annual revenue over $14 billion, through its market-leading companies including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.

Mercer also provides advice and market data on international and expatriate compensation management, and works with multinational companies and governments worldwide. It maintains one of the most comprehensive databases on international assignment policies; compensation practices; and data on worldwide cost of living, housing, and hardship allowances. Its annual global mobility conferences and other events provide companies with the latest trends and research on mobility issues. Visit https://mobilityexchange.mercer.com/ for details. Follow Mercer’s mobility news on Twitter @Mercer.

Mercer Cost of Living Survey – Worldwide Rankings 2018

Top 10 Cities vs Bottom 10 Cities

(The Mercer international basket, including rental accommodation costs)

Rank as of March

City

Country/Market

2017

2018

2

1

HONG KONG

HKSAR

3

2

TOKYO

Japan

4

3

ZURICH

Switzerland

5

4

SINGAPORE

Singapore

6

5

SEOUL

South Korea

1

6

LUANDA

Angola

8

7

SHANGHAI

China

15

8

NDJAMENA

Chad

11

9

BEIJING

China

10

10

BERN

Switzerland

194

200

MANAGUA

Nicaragua

197

201

TEGUCIGALPA

Honduras

200

202

MINSK

Belarus

204

203

TBILISI

Georgia

205

204

BLANTYRE

Malawi

201

205

KARACHI

Pakistan

192

206

BANJUL

Gambia

208

207

BISHKEK

Kyrgyzstan

209

208

TUNIS

Tunisia

123

209

TASHKENT

Uzbekistan

Source: Mercer’s 2018 Cost of Living Survey

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