I’ve lived in Hong Kong for more than a decade. I’ve seen its progress and of course, how the cost of living rises over the years. As the population in Hong Kong increases, real estate, and other basic commodities are at their high too.
Undoubtedly, Hong Kong ranked in the top 5 in last year’s Worldwide Cost of Living index released by the Economist Intelligence Unit (EIU).
The 2021 Worldwide Cost of Living Index examines the prices of more than 200 common items and services across 173 global locations.
Indeed, 2021 is a tough year for our finances, especially if you’re living in one of the top expensive cities in the world. Disruption in supply chains and shifting consumer demand have driven up the cost of living in major cities.
According to the EIU, prices for the products and services covered by the index have increased by 3.5 percent in local currency year over year, compared to just 1.9 percent this time last year.
Global supply-chain issues have led to price increases, while the Covid-19 epidemic and health protocols continue to disrupt worldwide production and commerce.
Because the index is based on costs in New York City, locations with stronger currencies versus the US dollar will likely show higher in the rankings.
American, European, and developed Asian cities continue to dominate the top ranks. The cities with the lowest rankings are mostly in the Middle East, Africa, and developing portions of Asia.
As Syria’s war-torn economy continues to struggle, the city of Damascus once again ranks as the world’s cheapest city. In 2021, Damascus and Tehran, as well as Caracas, Venezuela, and Buenos Aires, Argentina, all suffered extreme severe inflation.
Here are the most expensive cities in the world based on the EIU study:
Tel Aviv, Israel (Cost of Living Rating: 106)
It’s the first time that Tel Aviv topped the rankings coming from 5th place in 2020. The city on Israel’s Mediterranean coast has a considerable increase in groceries and transportation expenses.
Paris, France (Cost of Living Rating: 104)
Tied with Singapore this year, the City of Love dropped from number one to number two. It’s always been on the top spot over the years with the high cost of rent, commodities, and other things.
Singapore (Cost of Living Rating: 104)
Singapore is Southeast Asia’s most expensive city. It boasts clean streets and state-of-the-art infrastructures. Due to its land area, the rent, real estate, and other amenities in Singapore are higher than in most Asian cities.
Zurich, Switzerland (Cost of Living Rating: 103)
The largest city in Switzerland is also the world’s financial and banking capital. Its attractive and picturesque views of the mountainous landscape on Lake Zurich make it an ideal tourist destination.
Hong Kong (Cost of Living Rating: 101)
As China’s “special administrative area,” Hong Kong is the fifth most expensive city worldwide. It has the highest petrol prices and other basic needs. It’s also one of the business hubs in Asia.
New York City (Cost of Living Rating: 100)
As the baseline for the EIU study, New York City ranked sixth place. As they always say, if you can make it in the Big Apple, you can make it anywhere. It’s because of the high cost of almost everything from groceries to petrol among other stuff.
Geneva, Switzerland (Cost of Living Rating: 99)
The second-largest city in Switzerland lands at the number seven spot. Located at the French-Swiss border, Geneva is the financial center of the United Nations and Red Cross in Europe.
Copenhagen, Denmark (Cost of Living Rating: 97)
Food and housing expenses in Copenhagen are higher than in most cities. Surprisingly, the population prefers to use bicycles for transportation yet gas prices are extremely high in this Danish city.
Los Angeles, California (Cost of Living Rating: 96)
The city of angels has sky-high prices for goods and services. Only four points behind New York City, Los Angeles is an ideal tourist destination for beach lovers.
Osaka, Japan (Cost of Living Rating: 94)
When we think of Japan, the first thing that comes to our minds is the busy streets of Tokyo and the booming economy of this Asian nation. However, Osaka is more expensive than Japan’s capital. Osaka attracts visitors from all over the world that want to try delicious street foods in the market and other forms of entertainment.
Business Expansion on Expensive Cities
Expanding your business in these cities may not be a viable option if you want to explore new markets for your enterprise. However, there are lots of feasible locations where you can try to test the waters of the global market.
Partnering with an employer of record (EOR) service provider can save you time and resources as you expand in other economies. Employ is an EOR provider that has a global reach of most major cities around the world. As your EOR partner, we will handle all the HR and Admin tasks for your distributed teams. We offer global employer services, international payroll services, and visa and immigration services for your organization.
Learn more about our EOR services today and let’s make your international goals into reality.
Olivia Yu has decades of experience in the Human Resources industry. She’s the Regional Director for Asia Pacific of a famous international HR company. Olivia’s international experience inspires her to write articles about human resources and global staffing.