Top Ten Most Expensive Cities and the Economics of Why!

As the world gets smaller and smaller (because one it’s overpopulated and two because we can whizz around it at the speed of light, or almost, these days) and as we are told that the economy is failing, we should or could be setting our sights on somewhere else to move to. What are the zip codes around the world where it’s chic, but the price will be a shock to live? Here’s the list of the top ten places, you might be wanting to move to only if you have insider-dealing knowledge or you got the fat-cat bonus average this year of nearly $10 million. Otherwise, it’s not worth thinking about. Ready for shock treatment? We’ve just taken the price of two items, bread and milk to give you some idea. But, the ranking is based on a whole lot more. It includes basic foodstuffs, living expenses and entertainment. In fact, there are 400 prices and 160 different products. The two basic items that we have taken (bread and food) will give some food for thought, at least and a table for comparison.

1. Tokyo, Japan

The Yen might be weakening, but Tokyo hasn’t got that news yet. It’s the most expensive place in the world. It’s been at the top for 14 years out of 20. The relative cost (with New York as the base rate in the ranking) has fallen and that’s because of deflation and a weaker yen. However, it’s in number one position again because the land prices are so high. It has limited land available and that means rising costs whenever you want to do anything. High energy prices have also had an effect on the cost of living in this city.

Bread: $9.06

Milk (1 l): $2.93

2. Osaka, Japan

What is it with Japanese cities being the most expensive? Whatever it is, they are 11 out of the top 20 in the list of the most expensive cities in the world today. That’s almost double the number just ten years ago.

Bread: $7.94

Milk (1 l): $1.68

3. Sydney, Australia

Once the backyard of western countries, a play area, young and fun…and cheap. Not so anymore. The third most expensive city in the world is Sydney. A decade ago, there were no Australian cities in the ranking. It has a triple-A rating for its economy and fiscal position right now, which is more than can be said for most. That means more people and that means increased prices.

Bread: $5.03

Milk (1 l): $1.93

4. Oslo, Norway

We always knew that Oslo was the most expensive place to live in the EU. It’s still at the top of the list. It’s sometimes envied in Europe and around the world for its lifestyle. Per capita growth is over $100, 000. Wages have increased by 63% since the year 2000 and that has pushed prices up.

Bread: $6.31

Milk (1 l): $2.58

5. Melbourne, Australia

The strength of the Australian Dollar is probably the reason why the cities of Oz have seen their entry into the top most expensive cities in the world. The Australian dollar is so strong at the moment. In fact it’s the highest it has ever been for the past 28 years, right now. Investors are more than willing to move to Australia since they have nothing but praise for the Australian fiscal management. It has been predicted that the AUS $ may rise to $1.25 against the US $ over the next few years.

Bread: $4.87

Milk (1 l): $2.00

6. Singapore

There has been an increase in wages in Singapore and this has pushed up prices in turn. Is this why we are told we can’t get a pay rise? Is Singapore the victim of its rising success? Inflation is what is driving costs up in this place. Inflation is expected (Ministry for Trade and Industry and the Monetary Authority of Singapore) to reach 4.5% this year. It fell from 2011’s level of 5.2% but it increased last year (4.6%) and is set to remain more or less flat this year.

Bread: $3.25

Milk (1 l): $2.86

7. Zurich, Switzerland

Zurich came out tops last year in the official ranking. It has dropped to 7th place in one year, because of weakening of the Swiss franc. The Swiss government has made every effort to weaken the franc and this means that prices have tumbled in the city in the space of a year.

Bread: $6.08

Milk (1 l): $1.61

8. Paris, France

Ok, so the Euro is weak, the EU is suffering from decline, France is in recession officially (at last the government has admitted it. Well done, Monsieur Hollande, aka ‘Mr. Flabby…so cutting the French!’), but Paris is still in the top ten, by a wafer thin croissant. It's the housing prices that have resulted in an increase in the price of land, and that means increased expenses all round.

Bread: $8.95

Milk (1 l): $2.55

9. Caracas, Venezuela

Price inflation has hit the city due to artificial exchange rates. The Venezuelan currency is being pegged to the US Dollar and that means that prices are soaring. Salaries are not keeping up, but prices of basic foodstuffs are artificially high. Inflation reached the 20% mark at one stage in Venezuela.

Bread: $9.40

Milk (1 l): $2.73

10. Geneva, Switzerland

It was third last year. Down in the doldrums at number ten this year. Or is it the banks losing out because the rich and famous (and those that want to dodge their taxes have fled)?

Bread: $5.63

Milk (1 l): $1.42

Probably the only saving grace is that (hopefully) you are not sitting in one of these cities. If you are, then you probably understand that it’s time to make the move. Whether you are retired, working or a youngster just out of diapers, start considering the places where it’s hot and where’s it’s not! Living, something we used to take for granted every day, is costing us just more and more every day. Fancy zipping off to get a different zip code somewhere else around the world?  Wherever you decide to live, you’ll be paying more and more for things like beef, burgers, milk and basic foodstuffs. They are increasing in the US by 3-4% on average every year.

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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