Cape Town was ranked 178th in the 27th Mercer Cost of Living Survey. Picture: HPBotha/Pixabay
Cape Town was ranked 178th in the 27th Mercer Cost of Living Survey. Picture: HPBotha/Pixabay

Cape Town and Joburg among most expensive cities in the world to live in as an expat

By Alyssia Birjalal Time of article published Jul 5, 2021

Share this article:

South Africa’s Cape Town ranked 178th and Johannesburg 184th out of 209 cities globally, according to the latest study that ranks the most expensive cities to live in for overseas workers .

The 27th Mercer Cost of Living Survey, showed that Cape Town has moved up nine places and Johannesburg, eight places since its last report in 2020.

Hong Kong (China) which held the number one spot last year has fallen into second position making way for Ashgabat, the capital of Central Asia’s Turkmenistan as the most expensive city to live and work in for 2021.

Turkmenistan's financial crisis, which has led to food shortages and hyperinflation, is cited by Mercer as the reason why Ashgabat's cost of living has risen over the past couple of years.

Beirut (Lebanon) climbed up a massive 42 positions as a result of a severe and extensive economic depression due to an escalation of several crises — the country’s largest financial crisis, Covid-19 and the Port of Beirut explosion in 2020.

Tokyo (Japan), Zurich (Switzerland), Shanghai (China), Singapore, Geneva (Switzerland), Beijing (China), Bern in Switzerland ranked third to tenth respectively.

While Brasilia, Tunis, Tbilisi, Lusaka and Bishkek occupied the last five spots on the ranking list making these cities the least expensive for expats.

The rankings demonstrate how currency fluctuation and shifts in the prices of goods and services can affect the purchasing power of expatriate employees.

The survey includes more than 400 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location.

And the bi-annual report is based on the comparative cost of expenses including housing, transportation, food, household goods, clothing and entertainment, with New York City (ranked 14th on the list) was used as a baseline comparison and currency movements are measured against the US dollar.

The record high inflation has impacted many across the globe, as the Covid-19 pandemic increases the cost of living for expats who live and work away from home.

While South Africa's only two cities on the list, Cape Town and Johannesburg, have been at the bottom of the list in previous years’ studies due to the rand exchange weakness, they have since moved up list, reflecting the pandemic's impact on economies of the world, driving up the cost of living.

Meanwhile in African, N’Djamena (13th), Lagos (19th) and Libreville (20th) are the first, second and third costliest cities in Africa for international employees, while Lusaka (208th) is the least costly city in Africa in which to live and work.

Ilya Bonic, the Career president and head of Mercer Strategy, said the cost of living had always been a factor for international mobility planning, but the pandemic had added a whole new layer of complexity, as well as long-term implications related to health and safety of employees, remote working and flexibility policies, among other considerations.

“As organisations rethink their talent and mobility strategies, accurate and transparent data is essential to compensate employees fairly for all types of assignments. Covid-19 continues to cause unparalleled disruption prompting companies to re-evaluate how they will manage a mobile workforce in a post-pandemic world,” says Bonic.

Share this article: