Mercer's Quality of Living survey evaluates 214 cities across five continents to help identify which sites are the most expensive for expatriate living. The latest report was published on July 23rd, 2013 and provides valuable information for governments, multi-national companies, and people interested in living abroad.

New York is used as the base city with all other cities compared against it. Currency movements are measured against the US dollar. The survey covers and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

The survey gives an overall view of expenses related to living abroad, and is also an interesting study in the difference in basic costs between cities. For example,

Cost of Living Comparisons 

• Cup of coffee in Managua, Nicaragua is $1.54 compared to $8.29 in Moscow
• Fast food hamburger meal in Kolkata (Calcutta), India is $3.62, versus $13.49 in Caracas, Venezuela
• Cinema ticket is $5.91 in Johannesburg, compared to $20.10 in London.
• Luxury two bedroom unfurnished apartment rental for one month in Moscow is $4,600 a month which is about 14 times as much than Karachi, Pakistan

A continued graph of comparisons can be found on the report. Here is the listing for the most expensive cities for expats in 2013.

2013 Most Expensive Cities for Expats

1. Luanda, Angola

It may come as a surprise that the most expensive place to live is in Africa, but Luanda has been the most expensive city in the world for several years. This is due to the limited supply during the civil war, with strict trade barriers staying in place since the war ended in 2002. An example of the high prices: a basic hotel room costs around $400, a hotel buffet costs $75, and a pizza on the street sets you back $25.

2. Moscow, Russia

Moscow has oil wealth, high inflation rates and a shortage of mid-range hotel rooms - making it the most expensive city in Europe. It has the highest number of billionaires, and as a business hotspot many places cater to the high-end.

3. Tokyo, Japan

Home of some of the most expensive real estate in the world, Tokyo is the most expensive city in Asia. The strength of the Japanese currency and inflation on products and services such as clothing and transportation contribute to the high expenses.

4. N'Djamena, Chad

The capitol city of Chad has experienced a strong growth rate since it became a leading oil exporter.

5. Singapore, Singapore

With some of the most high-priced rental accommodations in the world, Singapore suffers from extremely high inflation. As one of Asia's largest financial centers, foreigners make up about 38 percent of Singapore's population. Some analysts fear that the recent rise in cost of housing, schooling and transport could discourage expats from moving or staying in the city long-term.

6. Hong Kong, Hong, Hong Kong

The city's property market is notoriously volatile with roller-coaster like dips. Constantly teetering on the tipping point, it is still one of the most expensive cities in the world.

7. Geneva, Switzerland

Despite decreasing to stable accommodation costs and a robust Swiss franc, Switzerland remains one of the most expensive countries in the world with three cities on the top 10 list. However, costs in this Western European city remain stable.

8. Zurich, Switzerland

9. Bern, Switzerland

10. Sydney, Australia

The high Australian dollar is just part of the reason why Sydney makes the top 10 list. Another element is Australia's cost structure in housing which perpetually drives up prices.

How Expats deal with a High Cost of Living

In our expat interview series, we often hear how different costs of living affect expat's life style. For example,

"We were pleasantly surprised to find out that as far as rent and utilities, living in Korea is much cheaper than in the States. But as far as groceries go, I've never missed Walmart so much in my life. If you eat seasonally, it can be affordable but we've had to find alternatives to the foods that we miss from back home because it can get quite expensive. The biggest difference is the taxes. They are much lower than the states, which has enabled to save a lot more than we would have living back home." via Lost in Travels

"It varies. Rent is extortionate in Hong Kong but things like food, eating out, clothes etc can be a lot cheaper than Sydney.
Space is very limited in Hong Kong, so living quarters are considerably smaller than that which you'd get back in Australia for the same price.
We are lucky to live in a complex where there's a big shopping centre downstairs with a train station, movie theatre etc." via Mint Mocha Musings

"It's much higher when it comes to rents and childcare. In fact, childcare is so expensive, that sometimes it makes more sense for one parent to stay at home (my case)." via A Mum in London

"The cost of living in Indiana is substantially lower than it is in London, but then so is the average salary. Of course similar comparisons can be drawn between London and other British towns, not to mention Indianapolis and New York City. But if I were to compare the countries as a whole, you've only got to look at petrol (gas) prices in Britain to realize that Americans have got it better than they realize. Thankfully, for the most part I don't let money – or the relative absence of it – weigh on my mind, so the change in cost of living hasn't had a profound effect on me." via Lost in the Pond

Part of managing these costs, especially if being transferred by your company, is to acquire adequate compensation. Find out how to Negotiate your Best Expat Package. You may also refer to posts "How to Live in a City with a High Cost of Living" and Most Expensive Cities For a Night Out" to figure out how to make it manage the high prices.

Do you live in one of these cities, or have tips on how to manage a high cost of living? Leave a comment below or contribute to the cost of living posts in the expat forum.

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