The World's Most Expensive Places To Live 2011

Each year, Mercer Consultingassembles its ranking of the most expensive places to live to help multinational corporations determine compensation allowances for expatriate employees, using New York as the base reference city.

Mercer compiles information from 214 cities worldwide, comparing the cost of more than 200 items in each location, including housing, transportation, food, entertainment, and more.

“The world witnessed an incredible number of natural disasters and political upheavals that have all affected the lives of expatriate employees to some extent. Currency fluctuations and the impact of inflation on goods and services–petroleum in particular–have led to some reorganization of the ranking," says Nathalie Constantin-Metral, the senior researcher at Mercer who compiled the study. “In North America, increasing petroleum prices continue to contribute to rising consumer prices, but many of its cities dropped in the rankings as price increases in other regions have been more severe, pushing U.S. cities down the list," she says.

In North America, the most expensive city is New York (32), while Toronto (59), Vancouver (65), Los Angeles (77), and Montreal (79) round out the most expensive cities on the continent. In these areas, as well in other regions around the world, accommodation prices continue to be the biggest drivers in cost of living, with rental demand and prices rising in the U.S., according to Mercer.

So, which cities are the world’s most expensive cities to live in? Click ahead to find out!

By Paul Toscano
Posted 12 July 2011

Note: In the slides that follow, gasoline prices are listed in gallons. The original Mercer report lists these prices in liters and CNBC has calculated this conversion.

Sao Paulo, in southeastern Brazil, leapt 11 spots from 2010, finding itself in the top 10 for the first time. Rio de Janeiro was another Brazilian city to shoot up in the rankings this year, climbing 17 spots to number 12.

“Overall, exchange rates in South America remain relatively stable, with the exception of local currencies in Brazil, Chile, and Costa Rica, which have all strengthened significantly against the U.S. dollar, causing the region’s cities to rise in the ranking,” according to Ed Hannibal, Partner and Leader of Mercer's Global Mobility business for North America.

Monthly Rent, Luxury 2 Bedroom: $2,397
Cup of Coffee: $1.92
One Gallon Gasoline: $6.32
Daily International Newspaper: $9.59
Fast Food Meal: $8.99

One of the most densely populated areas in the world, Hong Kong is also one of the most expensive. “Large numbers of expatriates are going to work there,” says Mercer’s Ed Hannibal, who notes that significant demand for housing in Asian cities such as Hong Kong is a major contributing factor to the high cost of living.

Monthly Rent, Luxury 2 Bedroom: $5,776
Cup of Coffee: $6.80
One Gallon Gasoline: $7.57
Daily International Newspaper: $3.59
Fast Food Meal: $3.52

Internationally known as both a major financial center and an extremely expensive place to live, Singapore ranks eighth in 2011, up from 11th in 2010. As in most Asian financial centers, Singapore remains in high demand for expatriates, pushing up housing costs and overall cost of living in the city.

Monthly Rent, Luxury 2 Bedroom: $3,289
Cup of Coffee: $5.37
One Gallon Gasoline: $5.94
Daily International Newspaper: $3.13
Fast Food Meal: $5.37

Although by international standards, Zurich is one of the most expensive cities in the world, it is only the second most expensive city in the country, although it rose one spot in the rankings from 2010. In the past year, the Swiss franc has increased in value compared to the U.S. dollar from around 94 cents in 2010 to almost $1.20 today, making it considerably more expensive for expatriates to relocate.

Monthly Rent, Luxury 2 Bedroom: $3,471
Cup of Coffee: $5.79
One Gallon Gasoline: $6.85
Daily International Newspaper: $4.21
Fast Food Meal: $11.89

Osaka has historically been an important center of commerce for Japan. During the daytime hours an estimated 1.1 million people enter the city for work, significantly increasing the number of consumers within the city limits, according to the Japanese Statistics Bureau. As a highly populated economic center in a densely populated country, Osaka has followed the trend of many Asian cities with limited accommodations and high expatriate demand, says Mercer.

Monthly Rent, Luxury 2 Bedroom: $2,905
Cup of Coffee: $6.66
One Gallon Gasoline: $6.40
Daily International Newspaper: $6.05
Fast Food Meal: $7.87

Although it is only the second-most populous city in Switzerland, Geneva is the most expensive metropolitan area in the country and the second most expensive city in Europe. Like Zurich, Geneva has also experienced a heightened cost of living as a result of the Swiss franc’s appreciation in value.

Monthly Rent, Luxury 2 Bedroom:: $4,523
Cup of Coffee: $6.31
One Gallon Gasoline: $6.96
Daily International Newspaper: $4.21
Fast Food Meal: $11.89

Coming in as the most expensive European city on the list, Moscow has maintained its fourth-place ranking this year. Mercer’s Ed Hannibal points out that Moscow still remains a destination for international business, which is a major factor in the demand for luxury housing.

Monthly Rent, Luxury 2 Bedroom: $4,000
Cup of Coffee: $8.54
One Gallon Gasoline: $3.56
Daily International Newspaper: $9.97
Fast Food Meal: $5.94

Ranking third this year is the capital and largest city of Chad, N’Djamena. The city has been mired in unrest and violent conflict, but remains the economic center of the country. Ed Hannbial points out that the cost of living list is based upon taste preferences of expatriates, including the types of brands purchased and satisfactory housing required. In a place like N’Djamena, not only is the availability of these products limited, but appropriate accommodations are also scarce.

Companies must take into account the personal security of their employees when choosing accommodations, which contributes significantly to costs by limiting the available areas in which they can live. N’Djamena is a city where this concern is particularly relevant.

Monthly Rent, Luxury 2 Bedroom: N/A
Cup of Coffee: $3.12
One Gallon Gasoline: $5.60
Daily International Newspaper: $7.07
Fast Food Meal: $26.00

The most expensive city in Asia is Tokyo, which maintained its second-place position from 2010. As the capital of the country and its most important economic center, Tokyo is a highly desirable and highly priced center for expatriates.

Monthly Rent, Luxury 2 Bedroom: $4,842
Cup of Coffee: $7.63
One Gallon Gasoline: $6.39
Daily International Newspaper: $6.05
Fast Food Meal: $7.87

The most expensive city in the world this year is Luanda, the capital and largest city of Angola. Mercer’s Constantin-Métral noted, “Finding good and secure accommodation for expatriate employees is a real challenge in most of the African cities, and costs can be significant compared to other regions. Accommodation prices are currently at record levels in cities like Luanda, and this is generally the main reason why we find so many African cities high up in the ranking.”

Monthly Rent, Luxury 2 Bedroom: $7,000
Cup of Coffee: $3.99
One Gallon Gasoline: $2.23
Daily International Newspaper: $4.78
Fast Food Meal: $20.38