Most expensive cities for expats 2021: Budapest takes a great position!

Mercer, the world’s largest human resources consulting firm, has released its annual Cost of Living Survey, now in its 26th year.

With over 400 cities included, Mercer’s annual report is one of the most influential and comprehensive of its kind. The study helps multinational companies and governments design expatriate compensation packages for their employees and manage international assignment costs.

Yet again, Hong Kong is the world’s most expensive city for expats, followed by Ashgabat in second place, Tokyo in third and Zurich in fourth. Singapore ranks fifth, down two places from the previous year and New York moves up from ninth place to sixth.

“The COVID-19 pandemic reminds us that sending and keeping employees on international assignments is a huge responsibility and a difficult task to manage. Rather than bet on a dramatic resurgence of mobility, organizations should prepare for the redeployment of their mobile workforces, leading with empathy and understanding that not all expatriates will be ready or willing to go abroad.”

Ilya Bonic, Career President & Head of Mercer Strategy

COMPARING THE COST OF LIVING

According to Atlas & Boots, it is important to remember that the ranking is not designed for locals. It is designed for multinational companies looking to place expat employees and is used as a tool to calculate how much overseas workers should be paid.

It also provides an indication to potential expats looking to determine how expensive their new country could be to live in.

Mercer uses New York as its base city and the US dollar as the base currency. The results differ from other surveys such as the Economist’s Worldwide Cost of Living as Mercer focuses specifically on products bought by expats.

If you’re a hiring manager looking to send an analyst to Kuala Lumpur, you need to know how much it costs to live there so you are compensating that worker fairly. It’s easier to consult a ready-made list than to do your own research on the ground. Most companies who use these lists are placing highly-skilled professionals or managers who are likely to earn more than the average local salary. 

Bryan Lufkin, BBC Capital

The weighting of goods and services are the same for all locations. The approach compares prices of comparable brands and retail outlets in both the home and host cities.

A drawback with this methodology is that certain factors can skew a city’s rating. For example, the high cost of car ownership and fuel in Singapore could propel it further up the rankings.

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REGION BY REGION

Six Asian cities, three European and one American city make up the 10 most expensive locations.

WORLD’S MOST EXPENSIVE CITIES FOR EXPATS RANKING

Sort the table below by cost of living or country to view the world’s most expensive cities for expats.

Rank	City	Country/Region	Rank 2019
1	Hong Kong	Hong Kong (SAR)	1
2	Ashgabat	Turkmenistan	7
3	Tokyo	Japan	2
4	Zurich	Switzerland	5
5	Singapore	Singapore	3
6	New York City	USA	9
7	Shanghai	China	6
8	Bern	Switzerland	12
9	Geneva	Switzerland	13
10	Beijing	China	8
19	London	UK	23
21	Moscow	Russia	27
50	Paris	France	47
54	Vienna	Austria	51
65	Rome	Italy	55
72	Munich	Germany	67
78	Brussels	Belgium	77
82	Berlin	Germany	81
87	Madrid	Spain	82
97	Prague	Czech Rep.	97
102	Barcelona	Spain	91
106	Kiev	Ukraine	150
139	Bratislava	Slovakia	131
148	Ljubljana	Slovenia	142
152	Zagreb	Croatia	143
156	Istanbul	Turkey	154
169	Warsaw	Poland	173
170	Budapest	Hungary	164
174	Bucharest	Romania	176
180	Sofia	Bulgaria	177
183	Belgrade	Serbia	181
197	Sarajevo	Bosnia & Herz.	194

Full list HERE.

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