Hong Kong Remains Most Expensive City In The World For International Employees

Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being, today released its 2024 Cost of Living City Ranking. The ranking offers insights to help multinational employers plan compensation strategies for their international assignees.

Hong Kong retained the top spot in this year’s ranking, followed by Singapore. Swiss cities Zurich, Geneva, and Basel round out the top five most expensive cities.

“Cost-of-living challenges have had a significant impact on multinational organizations and their employees,” said Yvonne Traber, Mercer’s Global Mobility Leader. “It is important for organizations to stay informed about cost-of-living trends and inflation rates and seek input from employees on these issues to effectively manage their effects.”

Rising housing costs in many cities around the world have made talent mobility a challenge for employers. Volatile inflation trends are also eroding the purchasing power of international assignees and putting additional strain on their compensation packages. These factors can make it difficult for employers to attract and retain top talent and can increase compensation and benefits expenses, limit talent mobility, and raise operational costs. 

“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending or even struggle to meet their basic needs,” continued Ms. Traber. “To offset these challenges, employers can offer compensation packages that include housing allowances or subsidies or provide other support services. They can also explore alternative talent sourcing strategies.”

Around the world

Asia has the top two citieswith the highest cost of living, primarily driven by high rental accommodation costs. These important economic hubs also attract a large number of expatriates, further driving up the cost of goods.

Five European cities are in the global top ten ranking, including four Swiss cities and London, which jumped nine places to eighth overall. While the cost of living in Europe varies across cities, the European Central Bank forecasts that the annual inflation rate in the Eurozone will continue to fall, meaning that costs could stabilize as European economies recover from recent setbacks.

Cost of living in the US remains a significant issue in 2024, with all ranked US cities placing in the top 100 and seven cities reaching the top 20. Canadian cities are at the lower end of the ranking for North American cities, as the Canadian economy has shown resilience and is outperforming expectations. Toronto is ranked the most expensive city in Canada (92), followed by Vancouver (101). Mexican cities’ cost of living went up significantly from the prior year due to the peso gaining value in 2023. Mexico City ranked 33, up from 79 in 2023, and Monterrey ranked 115, up from 155 last year. 

Within South America, Uruguay’s capital Montevideo ranks as the most expensive location for international employees (42). Several cities in the region saw significant movement compared to 2023 due to currency exchange rate and rental accommodation cost fluctuations: Santiago, Chile fell by 73 places to 160 in the ranking, while Bogota, Colombia rocketed 40 places to 174.

In the Pacific region, the rising cost of living is expected to put pressure on international employees this year. Sydney, Australia (58) ranks as the costliest city in the Pacific region, outrunning Noumea, New Caledonia, which has moved up 10 places to 60 in the global ranking.

The African cities that placed highest in the global ranking are Bangui in Central African Republic (14), Djibouti, the capital of the country by the same name (18), and N’djamena, Chad (21). Notably, Lagos, Nigeria dropped 178 places to 225, the largest change globally compared to 2023. This change is largely due to currency fluctuations including repeated devaluations of the naira. 

Ranked 15, Dubai, United Arab Emirates, is the costliest city in the Middle East, while Mumbai ranked 136 overall as the costliest city in India. 

2024 Cost of Living City Ranking

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