There are so many ingenious ways to measure the cost of living in places around the world. So if you’re thinking of heading off to a treasured locale in some far off land, you absolutely want to check this list. Six of the top ten culprits on The Domestic Budget from Hell list are from either China or Switzerland. The cost of living can rise or fall on the arcane machinations of currency values, population growth or plain old corruption. Some cultures have never got the hang of retail and their screwed-up distribution systems lead to classic horror stories like the legendary $40 cantaloupe of Tokyo. Here’s where it gets really interesting. Most of the insanely expensive cities that have dominated these lists in recent years have fallen off, Tokyo among them along with New York, London and Moscow making way for a whole new batch of prohibitively expensive destinations. So hold on to your wallet and take the tour, free of charge.
10. N’Djamena, Chad
Simply put Chad is a basket case sitting atop an ocean of recently discovered oil and N’Djamena is the capital. Mercer sums up the problems this way: “The main driver behind this is the difficulty finding good, secure accommodation for expatriates. “So the limited supply of acceptable accommodation is very expensive. The cost of imported international goods is also high.” Plain English translation:Chad is one of the world’s most corrupt countries. At least half the estimated $10 USD billion in earnings has been skimmed off for military hardware and embezzlement. The country also borders on war-stricken Syria and Sudan and the U.S. State Department counsels Americans to avoid border zones where the dreaded Boko Haram are a real threat. The average annual wage is $750. Average life expectancy is 51. Chronic drought devastates crops and there’s no real infrastructure to cut through the corruption. So with a full plate like that, Chad hasn’t got around to building condos, heath clubs and sushi bars for the oil workers that have flocked there. Cheap it is not. But it dropped from the number two slot last year, so maybe there’s progress.
9. Bern, Switzerland
When thinking about expensive cities mammoth urban monster is the image that comes to mind. Bern is a lovely city, a bucolic town of maybe 150,000 people. It is the capital with an Old Town that’s a UNESCO World Heritage site. But, pricier than Tokyo and London? Well start with a tight housing market. Then add the Capitol Factor with civil servants making very decent money. The biggest culprit has nothing to do with Bern at all. In fact it has more to do with Greece and the panic its long running death spiral in the European Union has caused. When it looked like Greece might default on EU loans, nervous investors dumped their Euros and bought Swiss Francs as a safe haven for their money bags causing it to zoom in value. Suddenly expats had to spend way more of their own currency to buy the francs they needed. As a result everything in Switzerland got more expensive without prices in stores actually being marked up.
8. Seoul, South Korea
Now this is more like it. A city of ten million at the head of the massive industrial juggernaut that is South Korea. Seoul begins the Asian onslaught. A nice apartment costs about two grand, not way out of line. But groceries and clothing are the silent killers, twice the level in the U.S. A decade ago Seoul was barely making the Top 50, now it’s Top 10 again largely because of international currency turbulence. The Korean Won has jumped 36% against the Japanese yen and 15% against the weakening Euro. Here’s how currency changes become price increases. That $2000 USD apartment to a Canadian with a weaker currency costs $2527 CAD. Ouch, eh?
7. Beijing, China
The expense of living in Beijing is giving whole new meaning to the expression “Forbidden City.” A three-bedroom apartment downtown can be north of US$4000. Office space is pricier than Manhattan. Eating Western food even at home is prohibitive. Tuition for schools starts at $25000 USD. Coffee has broken the $6 barrier. The rise in value of the Chinese yuan is propelling several growing Chinese cities up the expensive charts with bullets. Shenyang, a city of 8 million, 700 km northeast of Beijing jumped 33 rungs to 21st. Qingdao, home of the famous beer, jumped 24 to 25th.On the other hand cigarettes are 3 bucks a pack, making it hard on would be quitters.
6. Shanghai, China
Two hints this place will cost you. 1) There are more than 17 million people. 2) Even after the sell off the Shanghai stock market is up 89% over last year. So the place is sloshing around in people and money as incomes rise and a middle class emerges to compete with expats for scarcer and scarcer housing. Even now, a real estate website offers a tiny 2-bedroom apartment in what they “The Other Areas” for $2200 USD a month. Anything imported is hideously expensive. Levi 501’s are $116.50, a package of diapers is $32.00, and breakfast cereal is eight bucks a box. All this on top of the inflation from the rising value of the currency and it will be a pretty penny to live in the shadow of the iconic skyline. Except for Canadians who don’t have pennies anymore.
5. Geneva, Switzerland
The Swiss sticker shock continues in the Club Sandwich Index champ. Geneva is home to a number of United Nations organizations so there are a lot of professionals with commensurate salaries. There is an economic axiom that cities with high incomes tend to have higher prices. Hence the $7 toothpaste of Geneva. For some reason the cost of appliances in Genève is notorious. Expats scratch their heads at the basic microwaves costing $60 at Walmart while in Geneva they cost $300. The population is less than 200,000, but since the Swiss prefer to rent rather than own due to prohibitive ownership costs, there is a dire shortage of places to live. A three bedroom in the city is around $4000 USD. Chicken is $14 a pound, those Levis are $140, and the Big Mac is $15. It all adds up. At least it ranks lowest for wine with an average bottle costing $8.69. You’ll need it.
4. Singapore City, Singapore
In most western jurisdictions drinking and driving is criminal offense with serious consequences. Singapore follows the-time honored economic principal that if you want to discourage certain behaviors, tax the hell out of them. As for the drinking part a delightful website called Living in Sin says drinkable wine starts at $18 USD. A loaf of bread, a bottle of wine, a pack of cigarettes together costs $39.11 and that’s not even counting restaurant markups. Sometimes you can get cheaper at a 7/11. Another city with a strong currency and financial center. A 900 square foot apartment runs $4900 a month. The BBC rates it the most expensive place to buy clothes and basic groceries are 11% higher than New York. But the pain really kicks in when it comes to cars. More for traffic than environmental reasons, Singapore discourages the use of them by making their use crazy pricey. That BMW that cost $34,000 back home in Minneapolis needs a Certificate of Entitlement which after fees, taxes and plates costs an estimated $238,000. And honestly, how can you be a self-respecting financial mover and shaker without one?
3. Zurich, Switzerland
Being more expensive than Singapore is no easy task, but Zurich has done it. It’s become one of those places where price tags just bring tears to your eyes. Yet there are less than 400,000 people. The average movie ticket is priced at being over $21 while haircuts are $50. That ubiquitous pair of Levis a staggering $156. A two bedroom apartment is $4100 plus. Even the wine is almost triple the price in Geneva. Food in Switzerland is said to be 45% more expensive than the rest of Western Europe. Wait there’s more. As in Geneva a microwave sets you back $329. There are people in the Ozarks who can manage to source appliances and get them on retail shelves for less than $100. It would be classified as insane in any of Switzerland’s official languages if it weren’t for the fact it still has a ways to go to catch #2 on the list.
2. Hong Kong, China
The Mong Kok neighborhood on Hong Kong’s Kowloon Peninsula is by many measurements the most crowded place on earth with a population density of around 300,000 people per square mile. Manhattan’s corresponding figure is a mere 66,771. Though now repatriated to China it remains a huge global financial hub. Add a currency that’s pegged to the surging U.S. greenback. Put the three together and affordable housing becomes a distant memory while a cup of coffee has reached $11. An unfurnished two bedroom flat is about $6400 a month. As the Wall Street Journal headline said “In Hong Kong, the Apartments Are Fit for a Mosquito.” The Savills Live-Work Index puts the per employee cost to companies for home and office space to $123,000. That’s not counting paying them. Everything has to be imported pushing costs higher. The question is how do non-bankers get by?
1. Luanda, Angola
The seemingly unlikely heavyweight wallet muncher is this African seaport and oil hub. Angola has become the second largest oil producer in sub-Saharan Africa so foreign workers are flocking in. Most of the city’s population of five million lives in destitution on about five dollars a day, but big oil attracts expats with lots of money and expensive tastes. After a lengthy civil war, decent housing is scarce and a decent place costs almost $7000 a month. Anything imported is ridiculous. Think those jeans were expensive in Zurich? They’re $250 here. Food is double the New York price. Transparency International ranks Angola as the 14th most corrupt country in the world. Seems officials have lost track of five billion in oil money over the last decade down their pants somewhere. But hey, Marlboro are a buck ninety a pack.