NZ cities grow costlier but remain competitive

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Media Release
New Zealand cities grow costlier but remain competitive – Mercer Worldwide Cost of Living Survey 2008

• Auckland and Wellington have moved up in worldwide cost of living rankings, but cities in Europe and Asia continue to dominate top of the ranks
• Weakening of US dollar has caused significant changes in rankings
• Moscow is still the most expensive city for expatriates; Asunción in Paraguay is the cheapest

New Zealand’s major cities have continued to move up in the rankings of the world’s
most expensive cities this year, but remain attractive destinations for employers sending
expatriates on overseas assignments, Mercer’s 2008 Worldwide Cost of Living Survey
has found.

Europe and Asia continue to host the world’s most expensive cities, with one third of the top 15 most expensive cities European, and almost half of the top 15, Asian cities. Meaning comparatively, New Zealand remains an internationally competitive destination for expatriates, with its most expensive city, Auckland, ranked in 78th place globally.

Mr Rob Knox, head of Mercer’s information product solutions business, said currency fluctuations and rising accommodation rental costs around the world had significantly impacted this year’s survey results.

“A weakening US dollar coupled with the sustained appreciation of the New Zealand dollar, has pushed New Zealand cities further up the ranks,” Mr Knox said.

“The New Zealand dollar has strengthened by 13.5 per cent against the US dollar over the past 12 months, but relative to other global destinations New Zealand fares quite well.

“This cost of living survey is targeted to multi-national employers with a global workforce. If you look at some of the major cities in our region – Singapore, Hong Kong and Tokyo – New Zealand cities remain a competitive location to send employees and establish and grow business,” he said.

Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.

The global city rankings are relative to New York, which is used as the base city scoring 100 points.

“What this all means on a day to day basis is that the average cup of coffee in Auckland is NZ$4.00, compared with NZ$6.30 in Tokyo, NZ$6.45 in Hong Kong, NZ$5.79 in Singapore, NZ$5.43 in London and NZ $4.72 in New York,” said Mr Knox.

Mr Knox said while the cost of living has risen across the board, quality of living standards must also be taken into account with any cost benefit analysis to establish the true ‘value of living‘. For New Zealand, the broader picture paints an attractive proposition for the global workforce.

“Mercer’s 2008 Quality of Living data shows New Zealand major cities are amongst the best in the world. Its’ cities dominate the Asia Pacific region and rank within the world’s top 15 cities on items such as quality of housing and education, political stability and the variety of sporting amenities, bars and restaurants.

“Despite inflationary pressures, and the appreciation of the New Zealand dollar against US currency, New Zealand cities continue to enjoy among the best standards of living in the world, reinforcing the attractiveness of New Zealand for employees and employers of multi-national organisations,” he said.

Within New Zealand, Auckland ranked 78th globally (score 81), moving up 21 places from 12 months ago, while Wellington ranked in 93rd place (score 77.6), up 18 places.

“As the financial hub of New Zealand, it is not surprising that Auckland is the costlier city, as it continues to experiences greater demand for things like housing and goods and services, contributing to upward pressure on local costs,” Mr Knox said.

Across the Tasman, Australia cities have also grown costlier, Sydney continues to be the most expensive city for expatriates, moving up six places in the overall rankings since last year, to 15th place (score 104.1). Melbourne follows in 36th place (score 94.2), jumping 28 places, and Perth climbs 31 places ranked 53rd (score 88.5). Brisbane ranks 57th (score 86.80), up 29 places, while Adelaide remains the least costly city at 73rd place (score 82.80), despite jumping 23 places.

ENDS

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