20 Most Expensive Cities in the World

The world is getting more and more expensive with each passing year. Covid-19 may have led to an exodus of expats from the cities they work in. But with promising vaccines on the horizon, the situation will return to the normal sooner than later, and we may see the influx of foreigners back to the cities. The new experiment of remote working as well as learning, has ushered in a new era in which one can work for a company while sitting on the other side of the globe.

Nevertheless, as I said before, cities keep on getting more and more expensive. Rising population and increasing demands for homes and apartments has led to a sky-rocketing real estate market. For shared apartment in Brooklyn, New York, a person must pay $5000 per month in order to keep shelter over his/her head. Add that with rising inflation, and you will have another nightmare to deal with. In 2020, Economist Intelligence Unit (EIU) declared three cities sharing the position for the top slot. In addition, many other rankings such as those by Mercer and ECA international are published regularly. These rankings are made taking in consideration several factors such as CPI (basket of goods) which considers basic food and beverages such as cereal, milk, and coffee, housing costs, bedroom furniture, apparel, transportation expenses, medical care costs, recreational expenses etc.

Early 2020, more Western cities were in most expensive cities list. At the end of 2020, Asian countries moved up the rank, particularly Iran which saw its cities' rankings move 27 places on the list. Western cities' rankings declined, in particular, the United States owing to a weakening dollar and increasing trend of remote work. As similar with the popular ranking systems and based on few other factors such as the cost of living, CPI index of a city, we will first devise our methodology and rank each city based on these factors one by one.

Consumer Price Index

Consumer Price Index (CPI) is a common term used by statisticians and economists for quantifying the inflation. CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation. 

CPI has a direct relation with the inflation rate and the expensiveness of a city. If the CPI of a given city/country decreases, we have deflation or reduction in price of goods and commodities. If the CPI increase, inflation increases, and the price of goods rises. Many popular rankings such as those by EIU and Mercer utilize CPI for ranking expensive cities based on CPI.

Renowned rankings by financial institutions

Several financial institutions perform their own rankings based on multiple factors which include CPI, inflation rate, currency value, instability of accommodation prices etc. Some of these rankings are also based on a subset of human population such as foreign labor. Mercer, a global asset management company, performs ranking for expatriates. Economist Intelligence Unit (EIU) ranking is based on its own index named as Worldwide Cost of Living (WCOL) index, which reports the prices of 138 goods and services in about 130 major cities across the globe. ECA international also publishes its own rankings based on variety of factors. So, while compiling our list of 20 most expensive cities in the world we took these rankings into consideration. You can also check out our article about the most expensive cities in the United States.

20. Guangzhou, China

Mercer Ranking: 20

ECA International ranking: 15

Guangzhou is a port city of China, located north-west of Hong Kong. It has the 10th highest number of billionaires in the world which dictates, why it is so expensive. Guangzhou is 58% less expensive than New York. Consumer Price Index (CPI) of China stands at 101.5 whereas Cost of Living Index (CLI) of Guangzhou is 40.29% which is 4th highest in mainland China. Cost of a single bedroom apartment in Guangzhou city center will cost you no less than $650. Whereas an average monthly salary is above $1000. Overall, Guangzhou ranks high in infrastructure development and transportation charges are also small. If you are from Western countries wishing to move to Guangzhou, you will find adjusting to city quite well as it is highly multicultural.

19) Shenzhen

ECA International ranking: 17

Mercer ranking: 13

Dubbed as China’s Silicon Valley, it should not be any surprise that another Chinese city makes it to this list. Shenzhen is home to popular Chinese tech companies such as Tencent and Huawei. Shenzhen also has the fourth highest billionaires coming in after Beijing, Shanghai, and New York city. Cost of living in Shenzhen is comparatively cheaper than other Chinese major cities such as Beijing and Shanghai. You will need to pay $838 for a single bedroom apartment in the city center.

18) Ashgabat

Mercer ranking: 2

When Mercer placed Ashgabat as the second most expensive city, people started wondering how a landlocked Asian country can become so much expensive. According to Mercer, “Turkmenistan has been witnessing an important economic and social crisis, combined with hyperinflation.” This implies that everything from imported foods to garments has become more expensive. Turkmenistan is experiencing an inflation rate of 10%. Average salary in Ashgabat is quite low ($537) whereas the cost of living has risen dramatically. ($484 for one bedroom apartment).

17) Beijing

Mercer Ranking: 10

ECA International ranking: 18

Beijing is the capital of China and home to most billionaires anywhere on the planet. In both Mercer and ECA ranking, Beijing has been able to secure its place in top 20 most expensive cities. Beijing is a great place to move into but it doesn’t come cheap as its real estate market has risen by more than 30-40%. If you want to rent a one-bedroom apartment in the city center, it will cost you around $1,135. Owing a car in Beijing can be very hefty, however, public transportation is excellent and comes very cheap, nearly $0.5 for subway transport.

16) Shanghai

ECA International ranking: 11

Mercer Ranking: 7

Shanghai is a major financial center not just for China, but for the whole world. There around 46 billionaires living in Shanghai. By our estimates, Shanghai is the most expensive city in China, though it is comparable with Beijing. Shanghai is home to many Chinese companies owing to the presence of Shanghai stock Exchange, one of the largest in terms of market capitalization. Renting a one-bedroom apartment in city center will cost you around $1200, which is somewhat comparable with Beijing. Similarly, public transport is quite cheap. Besides being a major financial center, Shanghai is home to renowned academic and educational institutes and scores high in level of infrastructure.

15) Seoul

ECA International ranking: 8

Mercer Ranking: 11

Seoul is one of the most vibrant places of the East Asia. Home to some of the renowned academic institute KAIST and conglomerates such as Hyundai and Samsung, South Korea has come a long way in its short history of 70 years. However, living in Korea does not come cheap at all. CPI of Korea is at 107, and living costs are greater than those in mainland China, but less when compared with Tokyo or Hong Kong. Renting cost of a single bedroom apartment is $800 and average monthly salary is $2598 in Seoul.

14) Yokohama

ECA International ranking: 10

Yokohama is a major port city of Japan. It is the second largest city in Japan by population and is the third Japanese city to be included in this list. Yokohama is expensive when compared with other Asian cities such as Seoul and Shenzhen, however a higher average salary means you can afford to go by easily. In addition, entire Japan boosts a very robust and high-class public transport and infrastructure. A one-way ticket for local transport costs you more than $2.

13) Bern

ECA International ranking: 13

Mercer ranking: 8

Bern is the de facto capital of Switzerland and one of the safest cities of the world. It also ranks at 14th in terms of quality-of-life index. But none of that comes cheap. CPI of Switzerland as of 2021 is 110.22. In Bern, a single person will need at least $1400 to make it up in Bern that does not includes housing. For renting a single bedroom apartment in Bern, you will need to pay $1400. Transportation charges are also comparatively expensive as compared to many expensive cities in Asia.

12) San Francisco

ECA International ranking: 9

Mercer ranking: 16

Besides being one of the most desirable places to live in United States, San Francisco is equally expensive. Food, utilities, recreation, transportation etc. are all expensive in comparison to other parts of United States. Accommodation cost makes up the major chunk of livelihood with one bed-room apartment costing as high as $3000/month. CPI of United States is one of the highest in the world coming at an average scoring of 263.161%. Though San Francisco is expensive, it boosts one of the most diverse places in the United States. San Francisco has an average salary of $96,000 higher than the median salary of United States.

11) London

Mercer Ranking: 19

ECA International ranking:6

London, the British capital and the second most important and powerful financial center of the world, jumped four places to reach the position of 6th most expensive city in the world. High rental costs have mainly attributed to its improvement in the ranking. Also, in the Mercer list of June 2020, it occupied the 19th most expensive city position. CPI of UK stands today at 109.1 as of January,2021. Although it is quite expensive, London offers some of the highest salaries anywhere in the world which makes it arguably one of the most attractive European capitals for skilled professionals.

10) Los Angeles

EIU ranking: 9

Mercer ranking: 17

Los Angeles made it to the top 10 list published by Economist Intelligence Unit. Home to Hollywood and a huge metropolis, Los Angeles is one of the most diverse and vibrant cities of United States which comes with a very heft price tag. Los Angeles has some of the highest rental apartments (nearly double the national average). 

9) Copenhagen

EIU ranking: 9

ECA International ranking:12

Copenhagen is the third European city to be named in the top ten list by EIU. It is one of the most flourishing places of Northern Europe both economically and culturally. The company is quite expensive owing to a high rate of taxes and expensive real estate market.

8) New York

EIU ranking:7

ECA International ranking: 3

Mercer ranking: 6

New York city is the benchmark against which cities are ranked. The city is home to NYSE and NASDAQ, the two largest stock exchange in the world, in terms of market capitalization. Many fortune500 companies are headquartered in New York city. These factors make New York, essentially, one of the most expensive places on Earth. Renting an apartment in New York is quite expensive (a one-bedroom apartment will cost you more than a $1000). Basic food commodities are also quite high as compared to national average. An average person needs to spend 25% of his income on food items alone. Despite all this, New York has some of the highest salaries in the world.

7) Geneva

EIU ranking: 7

ECA International ranking: 4

Mercer ranking: 9

Geneva is the capital of major multi-lateral institutions. It is one of the safest, culturally diverse, and economically strong cities of the world.  It boosts low taxes and high income level, due to which its position dropped by five places in the ranking by EIU. 

6) Osaka

EIU ranking: 5

In its March ranking, EIU placed Osaka for the top position in list of most expensive cities. Since then, its has fallen four places which can be mainly attributed to Covid-19. The city is known quite a lot for its cuisines. In addition, Osaka is an important financial center of Japan housing Osaka securities exchange and companies like Panasonic. 

5) Tel Aviv

EIU ranking: 5

ECA International ranking: 7

Mercer ranking: 12

Tel Aviv is a major financial and technological center of Israel. The city ranks as the 25th most powerful global financial center. These factors have made it one of the most expensive cities in the world. Analysts have stated that the rising transportation costs have pushed its place in the expensive cities ranking.

4) Singapore

EIU ranking: 4

ECA International ranking: 14

Mercer ranking: 5

Singapore is an important trading and financial center of the world. Home to several insurance companies and hedge funds, Singapore ranks high on business ranking, quality of life index and corruption levels. Singapore has a very expensive real estate market which makes owning a house all the more expensive. CPI for Singapore as per January 2021 estimates is 101, which rose by 0.6 % since January. On average, a Volkswagen Golf will cost you $110,000 as compared to $44,000 in Norway.

3) Paris

EIU ranking: 1

Capital of the world’s fashion industry, it should not come as a surprise that Paris has been ranked number 1 by EIU. In its March report, Paris dropped four places however, it soon recovered its lost position owing to a rebound in business after easing of Covi-19 restrictions. Paris is known for high end fashion brands such as Louis Vuitton, Prada, Armani, and many others. CPI of Paris is 105.12 and the high prices in Paris can be summed to this point: Imagine if New York and Washington D.C were one place. In Paris, the restrictions on high rises and low availability of land pushes the price of apartments even further up.  

2) Zurich

EIU ranking: 1

ECA International ranking: 5

Mercer ranking: 4

Zurich is the largest and the most important financial center of Switzerland. Zurich ranks high on quality-of-life index and among the top ten most livable city. This indicates the reason why Zurich is so expensive. Another major reason for Zurich being the most expensive city of Europe is due to high salaries which drives up the costs of daily use commodities.

1) Hong Kong

EIU ranking:1

ECA International ranking: 1

Mercer ranking: 1

The most expensive city that made it to our list is Hong Kong. In all the three rankings that we used; Hong Kong came first. Hong Kong is one of the most important financial centers of the world. It has one of the highest urban population densities in the world. Its real estate market is the most expensive in the whole world and even people with high salaries fail to afford an apartment. The city has a very well developed and maintained transportation infrastructure as well. In Hong Kong, renting a one-bedroom apartment will cost you more than $2000 per month