Paris and Hong Kong for the first time joined Singapore as the world’s most expensive cities to live in, a study revealed on Tuesday, with the French capital jumping six places in just two years.
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with emerging market cities like Istanbul and Moscow plummeting down the ranking due to high inflation and currency depreciation, said the Economist Intelligence Unit’s bi-annual survey of 133 cities.
“Converging costs in traditionally more expensive cities … is a testament to globalisation and the similarity of tastes and shopping patterns,” she said in a statement.
“Even in locations where shopping for groceries may be relatively cheaper, utilities or transportation prices drive up overall cost of living,” she said.
Rising costs in cities are often driven by a vibrant job market attracting skilled workers with high wages, said Anthony Breach, an analyst with the British think tank Centre for Cities – which was not involved in the study.
Urban planners need to plan ahead and build more housing to keep prices affordable and overall costs down, Breach told the Thomson Reuters Foundation.
Aimed at the business community, the EIU survey is designed to help companies calculate cost-of-living allowances and build compensation packages for expatriates and travellers.
Researchers compared the cost of more than 150 items such as cars, food, rent, transport and clothing in 133 cities, tracking whether prices have gone up or down by comparing them with the cost of living in New York, which is used as a benchmark.
A woman’s haircut was about US$15 (€13) in Bangalore, India, compared to $210 (€185) in New York, for example, while a bottle of beer was about half a dollar in Lagos, Nigeria, and more than $3 (€2.6) in Zurich.
Paris – where the high cost of living has been one of the factors behind weeks of violent protests by Yellow Vest demonstrators – has ranked among the top 10 most expensive cities since 2003, with only transport and alcohol offering value for money compared to other European cities.
British cities recovered a few positions a year after reaching the cheapest level in more than two decades due to Brexit uncertainty, with London ranking 22nd and Manchester 51st, up eight and five spots respectively.
Political turmoil in Venezuela plummeted Caracas to the bottom of the ranking, followed by Damascus, Syria, with Karachi, Pakistan, Buenos Aires, Argentina, and New Delhi, India also featuring among the 10 cheapest cities.
But a city’s drop in the index does not necessarily mean life automatically gets cheaper for people living there, as prices adjust to inflation often quicker than wages, said Gunes Cansiz of think tank the World Resources Institute (WRI).
“The cost of living in Istanbul, for example, might seem to have decreased, but since household expenses have increased, this has no positive reflection on the daily life of Istanbulites,” said Cansiz, director at WRI’s Turkey Sustainable Cities programme.
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