Arab capitals climb the 'most expensive cities' lists

Published June 23rd, 2016 - 11:00 GMT
The main reason almost all cities in the Middle East increased in rank is that their currencies are pegged to the US Dollar.  (File photo)
The main reason almost all cities in the Middle East increased in rank is that their currencies are pegged to the US Dollar. (File photo)

Dubai and Abu Dhabi in the UAE have been ranked among the 25 most expensive cities to live in the world, according to the latest Cost of Living Survey published by Mercer, a global consulting leader.

The global rankings see Dubai as the 21st  most expensive city in the world, a rise of two places in comparison to last year, with Abu Dhabi, 25th  in world, changed from 33rd last year. The two UAE cities have experienced a rise in their world rankings in this respect, following the wider Middle Eastern trend of GCC countries becoming more expensive.

Rob Thissen, talent mobility consultant at Mercer Middle East, said: “The main reason Dubai and Abu Dhabi, and in fact almost all cities in the Middle East increased in rank, is that their currencies are pegged to the US Dollar, with Riyadh for instance currently rated more expensive than Rome.”

The Middle East has multiple locations situated in the world’s top hundred, with a strong showing primarily from the GCC countries. Several cities experienced a jump in the rankings, as they are pushed up by other locations’ decline, as well as the strong increase for expatriate rental accommodation costs, particularly in Abu Dhabi and Jeddah.

One Levant city, Beirut, is positioned as the third most expensive city in the Middle East and 50th  globally, down from 44th last year; which is tied with nearby Amman, Jordan, also 50th, representing a rise of four places from last year.

Returning to the GCC, Riyadh is the 57th most expensive city in the world, a significant difference from its 71st place last year; Manama, Bahrain sees its ranking at 71st, differing from 91st last year; Doha is 76th, up from 99th last year; Muscat comes in at 94th, jumping from 117th last year; Kuwait City is 103rd, also climbing from 117th position in 2015; lastly Jeddah is 121st, a change from 151st last year.

“These rankings uniquely combine day-to-day expenditure on goods and services such as food, clothing and transportation, with rental prices.  While prices of most goods and services are considered to be cheaper in Saudi Arabia compared with Europe, it is the expatriate rental market that pushes cities like Riyadh and Jeddah up the ranking,” Thissen said.

“What this means is that once again, cities in our region have become more expensive to send people to, with expatriates expecting increased cost of living and housing allowances. To the contrary, when sending staff out of the Middle East, multinationals have to be wary that cost of living allowances are likely to go down, and have to clearly explain and communicate this to their staff to avoid lengthy discussions,” he added.

North America

Cities in the United States have climbed in the ranking due to the strength of the US dollar against other major currencies, in addition to the significant drop of cities in other regions which resulted in US cities being pushed up the list. New York is up five places to rank 11, the highest-ranked city in the region. San Francisco (26) and Los Angeles (27) climbed eleven and nine places, respectively, from last year while Seattle (83) jumped twenty-three places.

Among other major US cities, Honolulu (37) is up fifteen places, Washington, DC (38) is up twelve places, and Boston (47) is up seventeen spots. Portland (117) and Winston Salem, North Carolina (147) remain the least expensive US cities surveyed for expatriates.

Canadian cities continued to drop in this year’s ranking mainly due to the weak Canadian dollar. The country’s highest-ranked city, Vancouver (142), fell twenty-three places. Toronto (143) dropped seventeen spots, while Montreal (155) and Calgary (162) fell fifteen and sixteen spots, respectively.

Europe and Africa

Two European cities are among the top 10 list of most expensive cities. At number three in the global ranking, Zurich remains the most costly European city, followed by Geneva (8), down three spots from last year. The next European city in the ranking, Bern (13), is down four places from last year following the weakening of the Swiss franc against the US dollar.

Several cities across Europe remained relatively steady due to the stability of the euro against the US dollar. Paris (44), Milan (50), Vienna (54), and Rome (58) are relatively unchanged compared to last year, while Copenhagen (24) and St. Petersburg (152) stayed in the same place.

Asia Pacific

This year, Hong Kong (1) emerged as the most expensive city for expatriates both in Asia and globally as a consequence of Luanda’s drop in the ranking due to the weakening of its local currency. Singapore (4) remained steady while Tokyo (5) climbed six places. Shanghai (7) and Beijing (10) follow. Shenzhen (12) is up two places while Seoul (15) and Guangzhou, China (18) dropped seven and three spots, respectively.

Mumbai (82) is India’s most expensive city, followed by New Delhi (130) and Chennai (158). Kolkata (194) and Bangalore (180) are the least expensive Indian cities ranked.

Australian cities have witnessed some of the most dramatic falls in the ranking this year as the local currency has depreciated against the US dollar. Brisbane (96) and Canberra (98) dropped thirty and thirty-three spots, respectively, while Sydney (42), Australia’s most expensive ranked city for expatriates, experienced a relatively moderate drop of eleven places. Melbourne fell twenty-four spots to rank 71.


Copyright 2021 Al Hilal Publishing and Marketing Group

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