Mumbai more expensive than Seattle and Canberra
Hong Kong tops the list of most expensive cities for expatriates to live in, followed by Luanda in Angola. Among Indian cities, Mumbai ranks highest at 82 and Delhi follows at rank 130, says a surveyreal estate Updated: Jun 25, 2016 18:07 IST
While Hong Kong tops the list of most expensive cities for expatriates, pushing Luanda, Angola to second position, Mumbai, ranked 82, is the most expensive city in India, followed by New Delhi, ranked 130, Chennai (158), Kolkata (194) and Bengaluru (180).
Mumbai is ranked higher and is more expensive than cities like Seattle (83), Frankfurt (88), Canberra (98), Berlin (100) and Istanbul (101) globally, according to Mercer’s 2016 Cost of Living Survey.
New Delhi and Bengaluru have become more expensive over last year, and their rankings have gone up. Bengaluru has witnessed the highest jump in ranking, on account of a surge in prices, especially on items pertaining to food and personal care. Inflation, amongst the highest in Indian cities, moved from 3.27% to 6.08%, during this period, in Bengaluru.
An increase has also been reported in the prices of cheese, poultry and coffee across price ranges. At the higher price range, items such as butter, mineral water and ice cream have increased drastically. High taxi fares, cost of auto and auto parts as well as running costs pushed up Bengaluru’s ranking, the report said.
“Despite volatile global markets and growing security issues, organisations continue to leverage global expansion strategies to remain competitive and to grow. With a large number of Indian multinational organisations progressively expanding their footprint abroad, 70% of them are expecting expatriate assignments to increase over the next two years to address business needs as well as build careers and leadership development,” says Ruchika Pal, India practice leader, global mobility, Mercer.
“Pricing, currency stability, inflation in Indian cities have a direct impact on the cost of expatriation for Indian multinationals. Costs of goods and services shift with inflation and currency volatility, in home and host cities, making overseas assignment costs sometimes greater and sometimes smaller.” adds Pal.
According to Mercer, 85% of the companies in India pay a cost of living (COL) allowance to their long-term assignees either as a separately identified allowance or as part of a single expatriate allowance, covering other items in addition to goods and services in the remuneration package. Seventy five percent of these companies determine the COL allowance using an index-based approach – usually the same index is used throughout the assignment for all typical long-term assignments.
Among the most expensive countries in the world, Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo is in fifth, up six places from last year. Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Geneva (8), N’Djamena (9), and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Windhoek (209), Cape Town (208), and Bishkek (207).
Mercer’s widely recognised survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons and currency movements are measured against the US dollar.
The survey includes over 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
Mercer’s 22nd annual Cost of Living Survey finds that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices, contribute to the cost of expatriate packages for employees on international assignments.
Across continents, countries with the highest current number of India assignees are the United States, United Kingdom and United Arab Emirates (UAE). Across continents, countries with the highest expected increase in the number of Indian international assignees are UAE, UK and Kenya.
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. This has had a direct impact on the cost of expatriate assignments for Indian multinationals. 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 23 places.
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.
Tel Aviv (19) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (25), and Beirut (50). Jeddah (121) remains the least expensive city in the region despite rising 30 places.
First Published: Jun 25, 2016 18:07 IST