Like the weather, everyone talks about the cost of living, but nobody does anything about it. Or so it seems. Some cities are simply more expensive to live in than others, and residents are forced to decide if the amenities offered offset the higher costs. Unless, of course, their employer dictates that they live in a specific city, in which case all they can do to offset expenses is ask for more money.
They’ll need to if they’re heading to the list of cities here, ranked solely based on cost of living as the most expensive in the world in 2021. Interestingly, New York, London, Paris, and San Francisco, all cities reputedly expensive to live in, are not in the top ten. Compiled by Mercer, an international human resources and investment management firm, the list evaluated 207 cities for cost of living. The list is intended to inform expatriates and the companies which hire them of the relative costs of individual areas. Here are the ten most expensive.
10. Bern, Switzerland
Bern, the capital of the Swiss Confederation, sits along a horseshoe bend of the Aare River. In comparison to other international capitals it is a relatively small city, with a population of about 144,000 (2020) in the city proper, and about 660,000 in the metropolitan area surrounding the city. Population density is high, residential housing is scarce, and thus expensive. Unemployment, as it is throughout Switzerland, is low. As a result, the cost of living in the Swiss capital is quite high.
Housing typically runs up to 50% higher than in comparably sized European cities, and the cost of groceries and dining out are correspondingly high. In the area of the city most favored by expatriates, a typical fast food meal runs about the equivalent of $13. To an American visitor, the price of gasoline at the pump at first appears cheap, until one realizes the price is based on a liter, rather than a gallon. Gasoline costs about $6.50 per gallon, roughly the same price as a gallon of milk.
Switzerland is well known for being a tax haven, as well as a banking stronghold known for its discretion. Nonetheless living in the Swiss capital is an expensive proposition. Numbeo estimates the cost of living in Bern is over 12% higher than in New York, generally regarded as North America’s most expensive city. A single person’s monthly expenses are estimated to be around $1,500, excluding housing. Rents and additional housing expenses, such as utilities, cable, and internet, can easily double that amount.
9. Beijing, China
The opposite of Bern, Beijing is the most populous national capital in the world. Nearly 22 million people call the city home, though it is far from the most heavily populated city in China. It is also one of the oldest cities in the world, with over 3,000 years of documented history. It draws in more money from tourism than any other city in the world, except for Shanghai. It is home to over 90 institutions of higher learning, ancient architecture and some of the world’s most modern, and was declared the fifth wealthiest city in the world in 2021.
It is also one of the most expensive cities in which to live, with the cost of living exceeding that of 77% of other Asian cities. The primary driver of the high costs is housing, which is perpetually in short supply. Living outside the city proper can alleviate some of the costs, but adds to transportation costs and can result in lengthy commuting times. The cost of food is also high for those determined to eat western style foods and beverages.
Reports from expatriates living in China indicate the cost of living can be reduced somewhat by living as the Chinese live, rather than maintaining a western lifestyle. But even then, the price of housing presents a formidable expense. In general, the further one lives from the central business district the less expensive housing is. And accommodations are usually small, even cramped, when one considers the amount of the monthly budget that is applied to it.
8. Geneva, Switzerland
In 2021, the cost of living in Geneva was ranked as being 38% higher than that of London, a city not known for being an inexpensive place to live. In Geneva, as in all of Switzerland, having a cable or internet service provider is not all one needs to enjoy television or radio. Switzerland requires a license to own either, renewed annually at a cost of about $350 dollars, nearly $30 per month. Cable and internet fees are in addition to the license. All resident households are required to pay the fee, whether they have a radio and television or not.
Groceries are more expensive in Geneva than in about 30% of other European cities. A gallon of milk costs more than $7, so does a dozen eggs, and two pounds of round steak over $50. On the other hand, a pint of beer for home consumption averages less than $2.50, so it’s clearly not all bad. At a pub it is generally much higher.
Estimates of the cost of living in Geneva vary widely among online sites and travel agencies, but Mercer ranks the Swiss city as the eighth most expensive in the world, up from 11 just three years prior. As a major international financial center and a resort it is also consistently ranked as one of the world’s most livable cities, as long as one can afford it.
Exotic Singapore always ranks highly on lists of great places to live. One may sit in the famed Long Bar at Raffles, where the drink known as the Singapore Sling was invented, and ponder the fact that Somerset Maugham often did the same. Raffles Hotel is itself a National Monument, so declared by the government in 1987. But to live in Singapore is an expensive proposition, even if one’s tastes do not turn to high-end hotels.
Rent is expensive. A small studio apartment, or a one-bedroom, will set back the renter anywhere from $1,500 to $4,500 per month, depending on the distance from the center of the city and the amenities offered. Some Singaporeans rent out rooms in their own homes for considerably less, but with restrictions as to use of kitchen and bathroom. Not being able to cook at home adds considerable expense from taking one’s meals outside the home, which is also not cheap.
Nearly all food in groceries is imported, and western style foods, such as cheese, are expensive as a result. A pint of beer in a pub in the central part of the city will set back the imbiber over $10, sometimes over $15, which makes Raffles considerably less attractive to those without deep pockets.
6. Shanghai, China
The most heavily populated urban region in China, and the largest city in the world, Shanghai is also among the most expensive. Once a small fishing village and port, it is a major international trade center, a financial center, and the busiest container shipping port in the world. Unemployment is low, housing is scarce, and the result is a high cost of living for residents and visitors.
The cost of living in Shanghai is the highest in China. The primary cause of the high cost of living is housing, which is in short supply and high demand as employment continues to rise. Housing costs can be reduced somewhat by moving away from the central city, which of course adds to transportation costs. If one can adapt to living a Chinese lifestyle, especially as regards diet, costs can be reduced as well. But overall Mercer lists it as the sixth most expensive city in the world.
One site estimates it costs about $8,000 per year to live in Shanghai, without considering housing expenses including rent, utilities, and internet. Rent adds a minimum of $14,000 per year, for a small apartment well outside the central area of Shanghai. While that seems low, in practice, according to Mercer and other sites, expenses are in actuality much higher, and salaries in Shanghai have not kept pace with costs.
5. Zurich, Switzerland
Zurich is the largest city in Switzerland and one of the largest financial centers in the world. The cost of living is high, as in other Swiss cities, primarily due to high salaries and government fees on most services. Residents are required to purchase health insurance, and insurers are required to offer basic insurance at no profit rates. This means relatively affordable healthcare, though copayments are required for most services.
Food is expensive, especially meats, and even more especially beef. Eating out is also costly, though most Swiss eat their main meal of the day at lunch, when menu items are sometimes reduced in price, as well as in portions. Rents in the city are very high. Going outside the central area offers some relief, but a simple studio apartment for less than $1,000 per month is rare. And the cost of furnishing it is also high.
Owning a car is expensive. Not only are taxes on the vehicle, as well as fuel and maintenance expensive, there is virtually no free parking, not even in the suburbs. Unfortunately, public transportation, while reliable, is more expensive than in most European cities, with rides from the suburbs into the city center averaging about $15.
4. Tokyo, Japan
Although Tokyo is an ancient city, modern Tokyo is less than 80 years old. The city was all but destroyed during the Second World War, and rebuilt from the ground up in the decades which followed. The modern city which literally rose from the ashes from American fire bombing is the largest urban economy, measured in gross domestic product, in the world. It is also one of the most expensive cities in the world. As recently as 2019 Mercer ranked it second on its list of most expensive cities.
The cost of living in Tokyo is expensive for the Japanese too, as Japan’s government estimates the region is about 10% more expensive than the rest of the country. One site estimates it requires about $1,500 per month to meet basic living expenses in Tokyo for a single person, living in a 200 square foot studio apartment at some distance from a public transportation stop. For more convenient residences the price skyrockets.
A less space-limited apartment in a location more convenient to public transportation runs in the range of $2,000 and up. But few larger apartments exist. The Japanese prefer smaller homes in general, with less in the way of western furnishings, and western expatriates often find they must pay more for less. And as Tokyo continues to build upwards, the cost of living goes up, driven in part by the rising salaries needed to attract workers to the Japanese capital.
3. Beirut, Lebanon
The most expensive city in the Middle East is the Lebanese site once known as a tourist’s paradise for its beaches and entertainment. According to Mercer, Beirut jumped from number 45 to number three on its list of most expensive cities in just one year. A car is necessary, since the public transportation system is unreliable at best, and taxis, when available, are often expensive if one must travel any distance more than one or two miles.
Although another survey, Eurostat, rates Beirut fourth on the list of most expensive cities, it agrees with others that the high cost of rents is the chief contributor. It is the Middle East, and rents in the secure zones of the city and its suburbs are considerably higher than the dicey areas. Consumer goods are also expensive, as are prices for some foods. Beef tops $35 per pound, though most fresh fruits and vegetables are relatively inexpensive.
Inflation has caused prices to climb at a dizzying rate. In the spring of 2022, the inflation rate reached 208% and has remained near that benchmark. And while housing costs are high within the city, the cost of furnishing an apartment is even higher, with the prices for furniture, appliances, and other items. A package of household furnishings which would cost $2,500 in New York sets one back $6,450. In a similar comparison for groceries, $2,000 worth in New York costs about $4,600 in Beirut.
2. Hong Kong, SAR, China
Densely populated Hong Kong is an International Monetary Fund recognized Offshore Financial Center, and it houses the third largest concentration of billionaires in the world. It also presents one of the highest life-expectancies to be found in the world to its lifelong residents. Over 7 million people live on its just over 424 square miles. And it is expensive. 2021 saw it drop from most expensive to second on Mercer’s list, but not because the cost of living has gone down.
Leading the cost of living is the shortage of housing, and the resultant high cost. In Hong Kong, a very large percentage of income goes for a very small housing arrangement. Much of the food available in shops and markets is provided by China, and for the most part is relatively affordable. Imported food from Australia, the United States, and other areas is also available, and expensive. Meats lead the way for grocery expenses.
So, unless one is ready to join the billionaire’s club in Hong Kong, living there is a daunting proposition, at least concerning the cost of living. With Hong Kong, as with all of the cities on this list, it is easy to find websites which claim numerous ways to beat the high cost of living, though with dubious sources beyond anecdotal examples.
1. Ashgabat, Turkmenistan
In 1948 an earthquake destroyed most of Ashgabat, killing 110,000 people. Since entirely rebuilt, Ashgabat contains over 500 white marble buildings. Following the collapse of the Soviet Union the city was rebuilt again, and the white marble structures replaced the drab gray buildings favored by the Soviets. The BBC calls it a “City of Extremes,” one of which is the highest cost of living in the world, according to Mercer.
In Ashgabat, the cost of alcohol and tobacco, clothing, cell phone coverage, internet, furniture and appliances, groceries, restaurants, and incidental expenses all exceed those in New York by a significant factor. For example, communication costs of $200 in New York exceed $300 in Ashgabat, and $1,000 worth of groceries goes for about $1,500. Clothing is also extremely expensive, and one must be careful when shopping as counterfeited western items are common.
According to Numbeo, a 12-ounce bottle of beer costs just under $13, utilities for a small studio apartment over $1,000 per month, and a pair of Levi 501 jeans $125. What makes Ashgabat so expensive? Runaway inflation and a corrupt, repressive government top the list, according to most sites. Ashgabat is the capital of Turkmenistan, though it lacks the bustle usually found in the capital city of a nation, and often presents nearly empty streets to visitors.