Tokyo has once again resumed the top spot on the Economist Intelligence Unit’s list of the world’s most expensive cities to live in, the same somewhat dubious title it’s held for all but six out of the last 20 years.
Osaka, too, climbed up the 2013 list to second place, despite a fall in the relative cost of living there due to Japanese deflation and a weaker yen. The two Japanese cities rose to the top of the list thanks in no small part to the fall of two Swiss cities, Zurich and Geneva, which each saw the steepest declines in cost of living when compared with the base city, New York, among the countries on the list.
"The cost of living in Europe has seen relative declines thanks to economic austerity and currency fears," said Jon Copestake, the report’s editor.
On the flip side, New York, the United States’ most costly city, climbed 19 places to No. 27 due to a stronger U.S. dollar and rising costs of clothing and groceries. Of the 131 cities surveyed, just 12 saw a relative rise in the cost of living when compared with the global economic powerhouse.
While Vancouver was about 6 percent more expensive than New York, the most costly city in the Americas was easily the list’s biggest surprise: Caracas, Venezuela. The report attributes the dramatic rise (25 spots from last year) to a change in inflation and fixed exchange rates with the U.S. dollar.
“Some observers may be surprised to see Caracas feature among the 10 most expensive cities,” Copestake said in the report. “Price volatility in the Venezuelan capital has certainly been strong -- so strong, in fact, that official inflation reached almost 20 percent, while aggregate price movements in the survey were over 25 percent year on year.”
If alternative parallel exchange rates were applied, Caracas would be on par with the cheapest cities surveyed.
Copestake noted that cities in Asia and Australia have been rising “on the back of wage growth and economic optimism.”
“This means that over half of the 20 most expensive cities now hail from Asia and Australasia," compared to just eight from Europe. One decade ago, it was 10 European, six Asian and four American cities.
Strong economic growth has supported inflation and currency swings that have made cities like Sydney and Singapore more costly than ever. Asia, however, is also home to over half of the world’s 10 least expensive cities: Tehran, Iran; Jeddah, Saudi Arabia; Panama City, Panama; Colombo, Sri Lanka; Bucharest, Romania; Algiers, Algeria; Kathmandu, Nepal; New Delhi, India; Mumbai, India; and Karachi, Pakistan.
Researchers at EIU compared more than 400 individual prices across 160 products and services including food, drink, clothing, household supplies, rent and transport to come up with their results. The bi-annual study is meant as a tool for human resources and finance managers to calculate cost-of-living allowances and build compensation packages for both expatriates and business travelers.
Scroll down for a look at the world’s 10 most expensive cities in 2013.