Summary:

This annual study provides a comprehensive analysis of the cost of living, wages, and purchasing power for both expatriates and ordinary residents across 103 major cities worldwide. The geographical distribution of cities in terms of cost of living varies significantly between expatriates and ordinary residents.

For expatriates, no clear geographical pattern emerges, primarily due to their preference for high-end imports, which minimises the impact of local factors on their cost of living. Conversely, a distinct pattern is evident for ordinary residents, with Western cities generally being more expensive. This discrepancy is largely attributed to higher labour costs in the West, which inflates the prices of non-tradable services and, consequently, the overall cost of living.

The top five cities boasting the highest purchasing power are Copenhagen, Vienna, Geneva, Zurich, and Berlin. Despite high living costs, residents in cities with elevated wages can afford more goods and services than those in cities with lower costs of living. For example, Zurich, despite ranking as the third most expensive city for ordinary residents, holds the fourth-highest purchasing power due to its relatively high wages. Thus, the study of purchasing power offers an alternative perspective, enabling a more holistic analysis of living standards across different cities.

A special feature in this edition explores how post-pandemic supply-chain disruptions have affected the cost of living in major Asian cities. Recent years have brought new economic shocks — from COVID-19’s inflationary pressures to rising energy prices and geopolitical tensions. These challenges have reshaped urban life, pushing up the prices of essential goods and prompting residents to adjust spending habits, including allocating more to food and less to transport due to higher fuel costs and remote work trends.

By NG, Wee Yang