This is the 8th DB annual survey of global prices and living standards from various countries and cities around the world. We've added some new cities this year whilst still trying to keep the analysis to cities and countries relevant to global financial markets. We continue to refine our methodology and while it's impossible to exactly match products and services around the world, we try to ensure as much uniformity as possible and then convert prices back to USD. We mostly use crowd sourcing as our input data.
Over the last 12 months, the dollar has strengthened against all but the Egyptian Pound of the 42 currency pairs used to calculate this report with the biggest losers the Turkish Lira (-31%) and the Argentine Peso (-55%). Indeed this is the overall story since we started this report in 2012. Over this full period and also over the last 5 years the dollar has out-performed all these currencies covering both the EM and DM uni- verse. Of the 42 countries, 27 have seen their currency fall by 20% or more versus the USD over the last 5 years with the Norwegian Krone (-31%), Swedish Krona (-31%), Mexican Peso (-31%), Brazilian Real (-43%), Russian Rouble (-44%), Nigeri- an Naira (-55%), Egyptian Pound (-59%), Turkish Lira (-64%) and the Argentine Peso (-82%) at the bottom of the pack. Sterling (-23%), the Euro (-20%) and the Swiss Franc (-14%) have also seen significant drops.
In this year's report we highlight which cities - across products, services and income - have seen the biggest change over the last year and also over the last 5 years.
Indeed, in 2019 the long standing dominance of Zurich as the city with the highest salaries and disposable incomes (after rent) is over. We have a new city to send our CVs to and that's San Francisco. Zurich drops to number 2. San Fran has climbed a stunning 7 and 21 places on these two measures over the last 5 years. It's also climbed 7 places to number 9 over both the last 1 and 5 years in our quality of life index (more later).
Overall, this shows that the rapid growth of the US tech sector is helping San Fran beat traditional capital cities for incomes. Whilst its cost of living is increasing each year and rising up the cost rankings on most measures we cover, it still lags major global capitals. In terms of 2-bed rents however, it is only behind Hong Kong.
Part of the 5-year climb of San Fran is also a US and USD story as New York, Boston and Chicago fill out the rest of the top 5 in terms of salaries and disposable incomes. They have all entered the top 5 recently as the US economy/USD powers ahead
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helping edge out Australian and major European cities. When we started this report back in 2012 the US was a very cheap place internationally and salaries were generally competing to be in the top 10, not dominating the top 5 as they do today.
If Zurich has lost its top spot on incomes/salaries, it still tops the charts or gets close in many of the most expensive goods and services. It is generally followed by Nor- dic/Scandinavian countries with other European cities not far behind.
Zurich though has climbed one place to top of our quality of life series edging Wellington back to second place. Copenhagen, Edinburgh, Vienna, Helsinki, Melb- ourne, Boston, San Fran and Sydney fill out the top ten. Major European cities seem to be falling down this list. Frankfurt has fallen 4 places to 13th this year, having been no.1 five years ago, as its property price to income ratio has risen compared to other cities while their purchasing power index has fallen. Paris is down 2 and 8 places over one and five years respectively to a lowly 36th with London down 6 and 15 places at 41st over the same period. Do these cities compensate with higher disposable incomes? Well the jury is still out as Frankfurt has fallen to 12th this year (6 places lower over five years), Paris unchanged at 28th, with London in 25th place.
In fact seven cities make the top 10 in both after rent disposable income and quality of life. They are Zurich (2nd and 1st), San Fran (1st and 9th), Boston (4th and 8th), Wellington (10th and 2nd), Sydney (6th and 10th), Melbourne (both 7th) and Copen- hagen (9th and 3rd).
If we further examine this balance between disposable income and quality of life, mega cities actually come out pretty poorly with New York (5th and 31st) perhaps edging out Tokyo (16th and 14th) depending on which way round you'd prefer the balance to be. Seoul is a respectable 21st and 29th with Paris (28th and 36th) and London (25th and 41st).
There are 21 megacities out of 56 in our quality-of-life sample and all bar Tokyo are in the bottom half on a quality of life basis with the bottom 12 all being developing country megacities which are also generally near the bottom in salaries.
Obviously this exercise looks at average salaries so megacities will have more people on much higher salaries (in EM but particularly DM ones), but the average worker struggles for income after rent and quality of life relative to smaller global cities. Aspiration must keep them going.
This quality of life measure is always the most subjective part of this study as different people have vastly different criteria for this. Our study is not the definitive guide on the matter but a good starting point for debate. Over the last couple of years readers have suggested that mega cities should rank much higher due to their huge cul- tural, entertainment and social opportunities. We don't score on that basis here.
For those looking for a weekend getaway Milan has replaced Copenhagen as the most expensive city in the world followed by Zurich, Madrid, Vienna and London. Istanbul continues to be the cheapest on the list helped by the large FX fall of late.
Zurich is again the place to find a long-term partner early in life and persuade them to stay at home at night, eat in, watch the telly and save your high disposable income or risk seeing it erode away on your partner. This is because it's by far the costliest place to go out on a date. This is followed by Oslo, Copenhagen, Helsinki and Tokyo. At the other end of the scale, five dates in Cairo cost the same as one in Zurich (and
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you get to see the Pyramids and the Nile for free!). There is a similar ratio for the next cheapest namely Bangalore, Buenos Aires, Istanbul and Mumbai.
Our 'bad habits' index of cigarettes and beers is most expensive in Melbourne, swapping places with Oslo this year. Sydney, Auckland and Dubai make up the top
5.EM countries are generally very cheap places to over indulge on this basis. Inter- estingly this is a rare area where Zurich is 'relatively' cheap ranking 19th out of 54 cities in expensiveness.
Don't lose or damage your iPhone on holiday in Brazil, Turkey, Argentina, India or Greece as iPhones are 25-65% more expensive than in the US - still the cheapest place to buy outside of Nigeria which we can't quite explain. Japan, Hong Kong, and Australia see similar prices to the US Apple store for phones.
For those living in Singapore, Copenhagen or Oslo you are actively discouraged from buying a new car as policy makes it extraordinarily expensive. So maybe walk or ride a bike more there. However you may want to take a cold drink with you in Singapore and a warm one in the other two cities. Be careful though as sport shoes in Copenhagen and Oslo are only behind Zurich in costs. The good news is that public transport is mid-ranking in terms of expensiveness in these three cities suggesting deliberate policy moves. London has the most expensive public transport in the world and is also the most costly place to hire a car. Petrol is around 5 times as expensive in Hong Kong (no.1) as in Cairo and Riyadh (cheapest).
Moscow and Istanbul have the cheapest internet in the world and if you're Face Timing from these two cities to Dubai it will be 9-12 times cheaper on one end of the call to the other.
If you are a connoisseur of the best coffee (a cappuccino in this case) then no need to stray from the home of coffee in Milan. It costs three times as much in Copenha- gen, Dubai, HK and Oslo.
Stockholm has replaced Helsinki in terms of most expensive hourly rate for a cleaner with Oslo third. There must be a snow tax! Even the 4th most costly - namely Boston - has severe snow at times. The sunnier/hotter climes of Cape Town, Buenos Aires, Lagos and Istanbul have the cheapest cleaners.
Grow your hair as long as you like in Copenhagen, Oslo and Zurich as haircuts are 10-15 times as expensive as in Dhaka, Bangalore, Manila and Cairo.
In this year's study the new cities are Buenos Aires, Dhaka, Cairo, Rome, Lagos, Riyadh and Seoul and the new countries are Argentina, Bangladesh, Egypt, Nigeria, Saudi Arabia and South Korea. The new additions in Argentina, Saudi Arabia and South Korea mean that this year we now have all the countries that make up the G20 covered. We also felt that we needed more representation from emerging markets. For instance, the only two African cities we previously had were both from South Africa, but now we have added Cairo and Lagos, the two most populous African cities. The addition of Dhaka, Bangladesh also adds to the emerging market cities, but is an interesting one as it is one of the densest cities on the planet as well. We added Rome in addition to Milan, as Rome's population is twice the size of Milan's.
Acknowledgement: Most of our price data is collected from Expatistan. We would like to give special thanks to the founder Gerardo Robledillo for permitting us to use this data. Our Quality-of-Life indices and salary datasets use data collected from
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Numbeo. We would like to thank the founder Mladen Adamovic for permitting us to use the data from his website.
We would also like to acknowledge the work of Apurv Chaudhari in this report.
Notes on data and methodology: Like our 2018 study, we have collected the data by surveying prices posted on the internet as well as from secondary sources. In order to ensure prices are comparable across countries, we have tried our best to use goods and services that are standard across countries or are close substitutes. As a result we have tried to ensure that all price distortions such as taxes, surcharges and discounts are included.
Much of our data is from sources that utilise crowdsourcing techniques to collect and aggregate price data. While this methodology provides them with regular data updates from a large sample, there may be issues with data quality and consistency over time. As a result some data points in our report may also be somewhat inconsistent over time although we tried to adjust for outliers where possible. Do note thus that prices, changes and ranks should be considered representative with considerable room for measurement and sampling error.
In order to further control for the quality and consistency of our data, we have kept previous years' data points referring to the same point in time year to year (i.e. the month of April in every year) to control from potential seasonality within and across regions and thus improve both intra- and inter- period comparability. We have also updated our 2018 data to take into account revisions for that year since last year's report was published. This provides for a more fair comparison. Changes from 2018 ranks are also noted, along with the change vs 2014 as a 5-year comparison.
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Table of Exhibits
Figure 1 : Quality-of-Life Indices (ranks) ..............................................................
Figure 2 : Monthly Salary (Net of Taxes) ..............................................................