Tokyo becomes world's costliest city for expats: survey

Wednesday 08th July, 02:54 PM JST

TOKYO —

Tokyo has knocked Moscow off the top spot of the world’s most expensive cities for expatriates.

According to the latest Cost of Living Survey from Mercer, Osaka is in second position, up nine places from last year, whereas Moscow is now in third place. Geneva climbed four places to fourth position and Hong Kong moved up one to reach fifth. Johannesburg replaced Asuncion in Paraguay as the least expensive city in the ranking.

In Mercer’s survey, New York is used as the base city for the index and scores 100 points, all cities are compared against New York and currency movements are measured against the U.S. dollar. Tokyo scored 143.7 points and is nearly three times as costly as Johannesburg with an index score of 49.6.

The 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 widely regarded as one of the world’s most comprehensive cost of living surveys and is used to help multinational companies and governments determine compensation allowance for their expatriate employees.

A significant reshuffle of cities can be observed in this year’s ranking, mainly due to considerable currency fluctuations worldwide. The majority of European cities moved down in the ranking with Warsaw experiencing the most dramatic change, plummeting 78 places from 35th to 113th. London and Oslo, both previously in the top 10, have dropped 13 and 10 places respectively. The same trend can be seen in Australia, New Zealand and India. Sydney has dropped 51 places from 15th to 66th and Mumbai has slipped down to 66th from 48th place.

Cities in the U.S., China, Japan and the Middle East have surged in the ranking. New York is a new entry in the top 10, jumping from 22nd to 8th place, and so is Beijing, now in 9th place, up from 20th in 2008. Japan now has two cities in the top 10 and Dubai has climbed 32 places to reach 20th.

Nathalie Constantin-Metral, a senior researcher at Mercer, said, “As a direct impact of the economic downturn over the last year, we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s ranking. Many currencies, including the Euro and British Pound, have weakened considerably against a strong U.S. dollar causing a number of European cities to plummet in the rankings.”

“With significant exposure to multiple economies and currencies, multinational companies continue to be greatly affected by the financial crisis. The cost of expatriate programs is heavily influenced by currency fluctuations and inflation rates. Now that cost containment and reduction is at the top of most company agendas, keeping track of the change in factors that dictate expatriate cost of living and housing allowances is essential,” Ms Constantin-Metral added.

“It is important for multinational companies to continuously benchmark against their peers to ensure compensation packages are fair and in line with the rest of the market.”

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Latest 15 of 30 Total Comments Show All

rogerbentham at 08:33 PM JST - 8th July

easy! just buy tons of stuff people need in tokyo, sell it for half of the standard list, and ta da! get RICH NOW.
seesaw at 08:58 PM JST - 8th July

Tokyo is costliest city for expats?...maji de? But I see the men dining at expensive restaurants, driving expensive cars...with plenty of J women around...and the Expat women lead a rich and lonely life.
pawatan at 09:01 PM JST - 8th July

This is an expat survey, where companies take an employee from one condition in their own country and ask them to live for two or three years in another country. Why would they downgrade their lifestyle to do that?

Compare your costs for your quality of life with that where you originated to decide if the cost of living index is justified.

Even if that is the absolute criteria (and I don't think it is - more on that in a second) one still can't say the price of a washing machine or cola varies that greatly WITHIN Japan. It's roughly the same everywhere.

But take your average expat. Not an executive, just a guy or gal asked to work overseas. If they're from London or San Francisco or Atlanta (or ), they probably don't live downtown in the poshest of locations, with the kids in the best schools, shopping at the nicest supermarkets, etc at home. Yet as an expat, they expect to. One can get a perfectly acceptable decent sized apartment in the burbs in the Tokyo area that is of a similar status to what they're used to. It won't be an 'international' community for sure, but they don't come from the posh section of town back home, either.

An executive on the go isn't the typical expat in Japan or anywhere. It's usually a normal to midlevel manager or worker bee. Why should they expect to live far above their standard from back home?
BTADT at 09:40 PM JST - 8th July

Good question Pawatan. Why should expats expect to live far above their standard back home here in Japan? Maybe we should park that question with the Sogo families. Shall I(we)? Should they Mr. Man? Front and center...answer up!!! Should they reap prosperity on international projects in countries abroad without those very countries abroad assessing the well being of their own that are living here in Japan?
NeoJamal at 10:13 PM JST - 8th July

I don't wanna live there, I work there!
blue_monday at 10:47 PM JST - 8th July

This is why foreign owned companies have been cutting back on ex-pats for some time now, first it was a preference for people without families, now they are even replacing them with, shock horror, local hire gaijin and bilingual Japanese. I've even heard murmurs of ex-pats considering a local hire contract to keep their job. In this global downturn options are limited and market forces are coming into play.

I've worked with many, their main role appears to be holding the hands of expats client side. Personally I think they should all have a 2 year induction course of living in a six mat room and studying Japanese before they are let loose in meetings.
pandatJoya at 11:04 PM JST - 8th July

noborito said:

or companies will just move out and trust a japanese person to head the company. that said, the company will simply fail.

What a ridiculous comment. For a start, logically it makes no sense. If a company "moves out" how can they then trust anyone to head something which is no more?

Then you're saying "If a Japanese person heads a company, the company will fail." Strange, I see many companies thriving in Japan, headed by Japanese. What world are you in?
Feekalmatter at 11:10 PM JST - 8th July

I live in a 90 m2 condo on the 23rd floor overlooking Tokyo Bay. I paid ¥58,000,000 for it 11 years ago even though its probably worth 20% less now through asset deflation. Nevertheless I feel comfortable and probably better off than if I had bought a similar sized condo in my own "home town" of Vancouver. Also there aren't the drug related gang wars and drive by shootings here and I can get safely pissed all night sitting on the bench in front of the local Lawson with no hassles.
some14some at 11:23 PM JST - 8th July

Yet another bad news for j-economy...foreign businesses will shun this market further.
nemoflow at 01:19 AM JST - 9th July

It is a survey. Surveys are subjective.
Badge213 at 02:57 AM JST - 9th July
Survey's are surveys... here are some items taken into "consideration" during the taking of costliest surveys.
1. The Cost of a TAXI from the Airport to the main downtown area. Well that's all fine and dandy for some cities, but in Japan and Tokyo where it's a rail and public transport society, the poll takes into account the cost of the 200000-30000 yen taxi ride, but doesn't take into account that virtually most people don't take a taxi ride from Narita to Tokyo, opting for much less public transportation options available. Just one of what I'm sure is many subjective items taken into considering. No doubt that Tokyo is expensive, many major cities are. But it can be cheap depending on life style.
Fadamor at 03:34 AM JST - 9th July

I don't know. If I'm running a corporation and relying on this survey to determine how much I should be allocating for an office in Tokyo, I'm going to go batty because the currency values will be compeltely different by the time any plan actually gets implemented.
maglev101 at 03:36 AM JST - 9th July

"...and the Expat women lead a rich and lonely life."

where, please tell?
inakaRob at 09:53 AM JST - 15th July

I have been to tokyo over 5 times. curretnly I live way out in the country in Fukui-ken. I dont see why people think japan, or tokyo for that matter is all that expensive. Other than rent, which is crazy high, everything else is the same as in the country. beer is still 5 bucks, unless you drink in an upscale place, but that can be said about any city. You probably wont have a car. That would save me tons. I spend a fourturne on car payments, and gas, and shaken. apples, chicken, food in genrel is pretty much the exact same price. We just get fresher food out in Fukui. video games are the same price, electricity is the same price, water still comes out of the facuest, basicly for free.... The way I look at it, if and when I move to tokyo or kyoto or osaka, my expenses will be about the exact same becuase I wont have car payments or gas money to worry about. and I wont be spending 200 bucks on a train to get to tokyo anymore. or 100 to get to osaka.
cleo at 10:07 AM JST - 15th July

apples, chicken, food in genrel is pretty much the exact same price

When my MIL, who lives in Tokyo, visits us here in the sticks she goes through the local JA like she was stocking up for a siege. A friend who has two homes, one here and the other in Tokyo, makes twice-weekly trips between the two, carrying Tochigi food down into the big city because it's that much cheaper.