There are many benefits to live in an emblematic city like New York or Singapore, but amenities and exclusivity can come at a high cost.
As Visual Capitalist’s Avery Koop details below, cities become “expensive” due to a variety of factors including high demand for housing, a concentration of high-paying businesses and industries, and a high standard of living. In addition, factors such as taxes, transportation costs, and the availability of goods and services can also contribute to the overall cost of living in global cities.
The infographic above uses data from the EIU to rank the most and least expensive cities in the world to live in. To make the list, the EIU examines more than 400 prices for more than 200 products and services in 172 cities, surveying various businesses to track price fluctuations. during the last year.
Inflation + Strong Currency = Expensive Cities
If you live in a city where many residents find it a challenge to put a roof over their heads, eat on their plates and make ends meet, you live in an expensive city.
But if that inflation is added to a strong national currency, you could be living in one of the most expensive cities in the world.
Singapore and New York tied for first place among the world’s most expensive cities in 2022, pushing Israel’s Tel Aviv from first place in 2021 to third place in 2022. Both cities had high inflation and a strong currency. Surprisingly, this is the first time the Big Apple has taken the ranking.
The city with one of the most expensive real estate markets in the world, Hong Kong ranked fourth on this list, followed by Los Angeles, which rose from ninth place in 2021.
Poor economies = Cheaper cities
Asia continues to dominate the list of the world’s least expensive cities, followed by parts of North Africa and the Middle East. While affordability sounds good at face value, being at the bottom of the rankings isn’t necessarily a coveted position.
While the cost of living in some of these nations’ cities is low, it comes at the price of a weak currency, a poor economy and, in many cases, political and economic turmoil.
The decade-long conflict in Syria weakened the Syrian pound, led to spiraling inflation and fuel shortages, and further collapsed its economy. No wonder its capital, Damascus, has maintained its position as the cheapest city in the world.
Tripoli and Tehran, the capitals of Libya and Iran, respectively, are next on the list, reflecting their weakened economies.
Meanwhile, seven Asian cities with the common denominator of high income inequality and low wages dominate the list of the world’s cheapest cities. These include three Indian cities, Tashkent in Uzbekistan, Almaty in Kazakhstan, Karachi, Pakistan’s most populous city, and Sri Lanka’s capital, Colombo.