Analysis & Profiles 28.6.2016 12:23 pm

Cape Town, Joburg among cheapest cities in the world

Mobility firm ranks most and least expensive cities to which to deploy expats.

Rand weakness has resulted in Cape Town and Johannesburg being named among the top ten least expensive cities in the world for companies to deploy expatriate employees to.

2016 Cost of living rankings
Most expensive cities Least expensive cities
1. Hong Kong, Hong Kong 1. Windhoek, Namibia
2. Luanda, Angola 2.  Cape Town, South Africa
3. Zurich, Switzerland 3. Bishkek, Kyrgyzstan
4. Singapore, Singapore 4. Blantyre, Malawi
5. Tokyo, Japan 5. Johannesburg, South Africa
6. Kinshasa, DRC 6. Minsk, Belarus
7. Shanghai, China 7. Tunis, Tunisia
8. Geneva, Switzerland 8. Karachi, Pakistan
9. Ndjamena, Chad 9. Gaborone, Botswana
10. Beijing, China 10. Lusaka, Zambia
SOURCE: MERCER COST OF LIVING SURVEY, 2016

According to a new Cost of Living Survey by mobility firm Mercer, Cape Town now ranks second among the least expensive cities in the world, compared with seventh in 2015, while Johannesburg has moved to fifth place from sixteenth a year ago.

Seven of the ten least expensive cities ranked are in Africa, with Namibian capital city Windhoek emerging as the cheapest. Hong Kong is the most expensive city for expats, Angolan capital Luanda came in second, after topping the table in 2015, while Zurich in Switzerland retained third place.

New York City, which ranks as the 11th most expensive city, was used as the base city for all comparisons, with all currency movements measured against the US dollar.

The survey, now in its 22nd year, ranked 209 cities across five continents, based on the comparative costs of more than 200 items from accommodation and fuel to a cup of coffee, beer and even a pair of blue jeans.

Rentals

SOURCE: MERCER COST OF LIVING SURVEY, 2016

According to data from the consulting firm, monthly rental of a two-bedroom unfurnished apartment of international standards and in an appropriate neighbourhood in Johannesburg would cost $1 139.43 while that of a three-bedroom house would cost $1 772.44. Rental accommodation of a similar standard would cost $6 809.47 and $12 007.18 per month in Hong Kong. At an estimated $15 200 per month, Luanda is the most expensive city in which to rent a three-bedroom house.

The price of unleaded 95 octane fuel is highest in Hong Kong, coming in at $1.79 per litre. A litre of fuel, of the same grade, costs $0.77 in Johannesburg and $0.71c in New York City.

Beverages

SOURCE: MERCER COST OF LIVING SURVEY, 2016

Beverage costs at medium priced establishments show stark discrepancies among select cities. A 330ml serving of imported beer costs $0.70 in Johannesburg compared with $2.29 in Singapore but is most expensive in Sydney, Australia at $2.39. One cup of coffee, including a service charge would cost $1.27 in Johannesburg compared with $7.77 in Hong Kong – unsurprisingly 1 litre of whole milk costs far less in Johannesburg than in Hong Kong. In Johannesburg, one litre of still water costs $0.55 compared with $3.13 in Beijing.

Mercer said volatile markets and stunted economic growth in several parts of the world, means expatriate remuneration packages are an important factor in cost efficiency. Currency fluctuations, the cost of inflation for goods and services, and instability of accommodation prices contribute to the cost of pay packages for employees on international duty.

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