Istanbul drops on most expensive city for expats list

Istanbul has dropped on the list of most expensive cities to live in for expats.

Istanbul now ranks 79 in terms of cost of living, according to the 2012 Mercer Cost of Living Study, which analyzed 214 global cities on five continents. Turkey dropped nine notches from last year becoming a cheaper city to live in.

Tokyo was listed as the most expensive city in the world in terms of cost of living with Luanda Angola in second. The report also noted that European cities became cheaper this year compared to the year before.

Mercer, the company behind the survey, provides human resources consulting in more than 40 countries servicing 25,000 clients. They examined more than 200 different factors, such as transportation, housing prices, food, clothing, home appliance and entertainment costs when compiling its cost of living index.

Tokyo is the world’s most expensive city for expatriates, pushing Luanda, Angola, down to second position, according to Mercer’s latest Cost of Living Survey. Osaka is in third position, up three places from last year, whereas Moscow remains in fourth and Geneva in fifth positions. Singapore and Zurich share sixth place, up two and one places respectively since 2011. Ndjamena, Chad, drops five places, but Hong Kong retains its ninth place.

Karachi (214) is ranked as the world’s least expensive city for expatriates, less than one-third as expensive as Tokyo. Recent world events, including economic and political upheavals, have affected the rankings for many regions through currency fluctuations, inflation, and volatility in accommodation prices.

In the UK, London (25) is the most expensive city for expatriates, down seven places from last year. At 133, Birmingham is up 17 places, having overtaken Aberdeen (144) and Glasgow (161). Belfast (165) is the UK’s least expensive city, up 13 places in the ranking since 2011.

The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including transport, food, clothing, household goods and entertainment. The cost of housing is also included and, as it is often the biggest expense for expatriates, it plays an important part in determining where cities are ranked. Mercer’s cost-of-living survey is the world’s most comprehensive and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city and all cities are compared against it. Currency movements are measured against the US dollar.

Nathalie Constantin-Métral, Principal at Mercer, is responsible for compiling the ranking each year. She commented: “Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategy, including expansion. But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages. Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them.”

“When compared to New York, our benchmark city, most European cities have witnessed a decline in cost of living. Some exceptions exist where accommodation prices have increased or additional VAT taxes have pushed the cost of living up. In North America, most cities have gone up in the ranking, as the US dollar has strengthened against a large proportion of the world’s other currencies. In Asia, more than six in ten cities moved up in the rankings, including all surveyed cities in Australia, China, Japan and New Zealand. Cities in Australia and New Zealand witnessed some of the biggest jumps, as their currencies strengthened significantly against the US dollar.”

New York, meanwhile, ranked 33 on the list and continues to be the most expensive city in the United States. With the U.S. dollar appreciating, Mercer said many U.S. cities moved up on the list this year.

Factors like natural disasters, economic and political volatility, exchange rate fluctuations, inflation and housing prices are factors that affect cost of living, according to Mercer.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For details, or to purchase copies of the individual city reports, visit

Author: istanbul

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