Top 10 most expensive cities in the world 2021: Singapore overtakes Hong Kong, but there's a new no.1

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Singapore, Hong Kong, and Osaka continue to be in the top 10, with Singapore ranking higher than Hong Kong this time (2020: Singapore ranked 4th, while Hong Kong ranked 1st).

The Economist Intelligence Unit (EIU) has recently published its global study, titled Worldwide Cost of Living (WCOL), revealing the top ten most expensive cities in the world.

The WCOL is a twice-yearly survey conducted by EIU that compares more than 400 individual prices across over 200 products and services in 173 cities. The data is collected each March and September, and is then compiled for publication in June and December.

This study, which has been carried out for over 30 years, has been designed to enable human resources and finance managers to calculate cost-of-living allowances and build compensation packages for expatriates and business travellers.

For December 2021, the EIU revealed the following as the top 10 most expensive cities worldwide 2021: 

#1 Tel Aviv, Israel - WCOL index 106
#2 Paris, France - WCOL index 104
#2 Singapore - WCOL index 104
#4 Zurich, Switzerland - WCOL index 103
#5 Hong Kong SAR, China - WCOL index 101
#6 New York, US - WCOL index 100
#7 Geneva, Switzerland - WCOL index 99
#8 Copenhagen, Denmark - WCOL index 97
#9 Los Angeles, US - WCOL index 96
#10 Osaka, Japan - WCOL index 94

The Israeli city of Tel Aviv has topped the rankings for the first time, climbing up from fifth place in 2020 and pushing Paris down to second place, a tie with Singapore. Per the report, Tel Aviv’s rise mainly reflects its soaring currency and price increases for around one-tenth of goods in the city, led by groceries and transport, in local-currency terms. Property prices have also risen, especially in residential areas.

Among Asian cities, Singapore, Hong Kong and Osaka continue to be in the top 10, with Singapore overtaking Hong Kong compared to 2020 (2020: Singapore ranked 4^th, while Hong Kong ranked 1^st).

Apart from the above, the report also noted:

1. The inflation rate of the prices tracked for WCOL across cities is the fastest recorded over the past five years. In fact, it has accelerated beyond the pre-pandemic rate, rising by 3.5% year on year in local-currency terms in 2021, compared with an increase of just 1.9% in 2020 and 2.8% in 2019.
2. Supply-chain problems, as well as exchange-rate shifts and changing consumer demand, have led to rising prices for commodities and other goods. The most rapid increases in the WCOL index were for transport, with the price of a litre of petrol up by 21% on average.

Digging deeper, the report revealed the cheapest cities in the world, as well as the biggest movers up and down the ranks among all 173 cities, as follows:

10 cheapest cities in the world 2021

#173 Damascus, Syria - WCOL Index 12
#172 Tripoli, Libya - WCOL Index 23
#171 Tashkent, Uzbekistan - WCOL Index 30
#170 Tunis, Tunisia - WCOL Index 33
#169 Almaty, Kazakhstan - WCOL Index 35
#168 Karachi, Pakistan - WCOL Index 36
#167 Ahmedabad, India - WCOL Index 37
#166 Algiers, Algeria - WCOL Index 38
#164 Buenos Aires - WCOL Index 39
#164 Lusaka, Zambia - WCOL Index 39

Biggest movers down the ranks in the past 12 months

#48 Rome, Italy -  WCOL Index 77.

• Index move: 0
• Rank move: -16

#57 Bangkok, Thailand

• Index move: -2
• Rank move: -11

#88 Lima, Peru

• Index move: -5
• Rank move: -11

#91 San Jose, Costa Rica

• Index move: -3
• Rank move: -9

#40 Dusseldorf, Germany 

• Index move: 1
• Rank move: -8

#40 Amsterdam, Netherlands 

• Index move: 1
• Rank move: -8

#50 Berlin, Germany 

• Index move: 1
• Rank move: -8

#50 Pittsburgh, US 

• Index move: 1
• Rank move: -8

#74 Dubai, UAE 

• Index move: -2
• Rank move: -8

#109 Al Khobar Saudi Arabia 

• Index move: 0
• Rank move: -8

Biggest movers up the ranks in the past 12 months

#29 Tehran, Iran

• Index move: 19
• Rank move: 50

#35 Reykjavik, Iceland

• Index move: 8
• Rank move: 21

#88 Kiev, Ukraine

• Index move: 5
• Rank move: 13

#27 Auckland, New Zealand

• Index move: 6
• Rank move: 11

#96 Moscow, Russia

• Index move: 4
• Rank move: 10

#104 Johannesburg, South Africa

• Index move: 8
• Rank move: 10

#58 Suzhou, China

• Index move: 5
• Rank move: 8

#65 Mexico City, Mexico

• Index move: 5
• Rank move: 8

#79 Prague, Czech Republic

• Index move: 3
• Rank move: 8

#79 Toronto, Canada

• Index move: 3
• Rank move: 8

Behind the WCOL Index

The WCOL rankings continue to consider and adjust to any shifts brought about by the COVID-19 pandemic, which have pushed up the cost of living across the world’s major cities.

The EIU acknowledged that although most economies are in the process of recovering, the world’s major cities still experience frequent surges in cases, prompting renewed social restrictions. In many cities this has disrupted the supply of goods, leading to shortages and higher prices.

Observing these rankings, it should be noted that the data for the survey was collected between 16 August and 12 September 2021, when US-China shipping prices had risen sharply, resulting in higher prices for goods. Cost was also affected by fluctuating consumer demand, which influenced purchasing habits. Additionally, investor confidence also affected currencies, further fuelling price rises.

The index, which is benchmarked against prices in New York City, presents the impact of these disruptions.

Of the ten categories in the Index, transport has seen the biggest price increases, with Index scores rising by an average of 3.8 points. 

Image / Provided

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