Expatriates don’t always have a choice of where they’re assigned to work, but they definitely need to know the cost of living in their assignment location. If your salary is paid by a US company, for example, that salary might put you at a huge disadvantage if you are working and living in Tokyo, Japan, which happens to be the most expensive city in the world for expats. (The news for Germany is much better.)
Companies with employees assigned to overseas locations usually offer some sort of cost-of-living allowance to supplement the increased costs. So even if you are going to an overseas location by your own choice, without company support, you need to know how the cost of living there compares to your current or home location. But how do you get that information? One excellent source is the xpatulator.com website, from which we derived the rankings discussed here.
It may surprise you to learn that, except for New York City, Honolulu, Anchorage, San Jose and San Francisco, most cities in the United States of America have a far lower cost of living than places in Asia, Europe, Africa, South America – and even Canada! My own hometown of Reno, Nevada ranks 455th out of 780. Most places in the southern states of the US rank much lower than that. My former hometown of Charlotte, North Carolina is 602 on the list. Some US cities, including Greenville, South Carolina and Wichita, Kansas, fall below New Delhi, India (624)! If they avoid New York, Hawaii, Alaska and California, most expats coming to the USA from other countries will enjoy a lower cost of living than where they come from! On the other hand, Americans are more likely to encounter higher living costs when they venture overseas.
The cost of living in Austria, Germany and Switzerland
Just where do the German-speaking countries rank? How do Austria, Germany and Switzerland compare to other countries worldwide and in Europe?
The xpatulator.com list of the “Top 25 Most Expensive Cities to Live in the World” for October 2012 reveals what you might expect, but also some real surprises. According to xpatulator.com, Tokyo is the most expensive city in the world for expats. But the next two on the list are in Switzerland. Zurich and Geneva rank number two and three respectively. Most of the top 25 cities are in Japan. New York City (Manhattan) is 14th, while London is 16th. If you want the cheapest place in Europe, then 764th place Bucharest, Romania is where you want to be.
Okay, maybe the cost of living isn’t the only factor you should consider. And you’ll probably be pleased to know that very few European cities are in the top 25 most expensive rankings. Besides Zurich and Geneva, only Monaco (11th), London (16th), Oslo (17th), Vaduz (in Liechtenstein, which uses the Swiss franc, 22nd), Copenhagen (24th) and Moscow (25th) are the only European cities in the top 25 list. Paris, at 56th, is surprisingly not even in the top 50. Stockholm, Sweden has 58th place. Vienna, Austria is one of the most expensive German-speaking cities, coming in at 107, but no city in Germany or Austria is in the top 100.
In addition to its city-by-city rankings, Xpatulator.com also lists an overall rank for each country. The overall, average rankings for the German-speaking countries are as follows: Switzerland 9, Austria 143, Germany 236. If you were choosing a German-speaking country based solely on the cost of living, you would pick Germany over Austria and Switzerland.
Xpatulator.com ranks seven German cities. The most expensive expat city in Germany is Munich. The Bavarian capital takes the 121st spot in the world rankings. (Amsterdam in the Netherlands is 128.) Next comes Frankfurt, Germany’s financial center, also known as “Bankfurt,” which is ranked 146. The other ranked German cities are Hamburg (193), Stuttgart (196), Cologne (235), Bonn (258) and Berlin (263). Interestingly, unlike most European capitals, Berlin is not the most expensive location in Germany. It’s in fact the cheapest German city (of those listed)! Compared to most other European capitals, Berlin’s a bargain. Look at this select ranking of 15 major European cities (from most expensive to least expensive):
- Zurich, Switzerland (1)*
- London, UK (4)
- Oslo, Norway (5)
- Copenhagen, Denmark (7)
- Moscow, Russia (8)
- Paris, France (10)
- Stockholm, Sweden (11)
- Rome, Italy (12)
- Luxembourg, Luxembourg (19)
- Vienna, Austria (21)
- Brussels, Belgium (29)
- Dublin, Ireland (38)
- Birmingham, UK (61)
- Marseille, France (71)
- Berlin, Germany (77)
*Rank (in parentheses) of the 125 European cities in the survey; not the world ranking
Xpatulator.com’s European rankings include 125 locations. Out of the major European capitals, only Madrid, Spain (86 out of 125), Lisbon, Portugal (95) and Athens, Greece (104) have a lower cost of living than Berlin (77). In general, southern Europe is cheaper than the north. The nations of the former eastern block (Hungary, Poland, etc.) also tend to have lower costs. The Eurozone crisis of the last few years has also contributed to a lower standard of living in Greece, Portugal and Spain.
One surprise for me was the relatively high cost of living in the Canadian cities in the survey. Toronto, ranked 46th, was the most expensive Canadian location, but all the Canadian cities were higher than I expected. Vancouver ranks 57th, Calgary 68th, Edmonton 82nd, and Montreal 94th. Ottowa (184) was the only Canadian city not in the top 100 most expensive world rankings. Canada overall took the 86th spot. Although some US cities are in “expensive” territory, most rank in the 400s, 500s and 600s. Even Chicago, at 301, is cheaper than any German city. Dallas, Texas has the 590th spot (right below Lithuania at 589). Houston, Texas is at 642, right below Warsaw, Poland (641). Texas (all areas) has an average rank of 633.
If you want to discover more about the xpatulator.com rankings, you can visit their site. Premium Reports using their online calculator cost $99 each, but you can view the basic rankings for free. The rankings are released quarterly, and are based on the comparative cost of living for expatriates in 780 locations around the globe. Xpatulator.com measures the local prices of goods and services in all 780 locations and then converts those into a single currency for comparison to create a cost of living index. So-called baskets include the cost of housing, education, healthcare and transportation, in addition to groceries, clothing, utilities and other basic expenses.
By the way, if you are seeking the cheapest locations in the world, you should head for India (758), Morocco (765), Algeria (768), Pakistan (770), Bulgaria (771), Cambodia (773), Romania (775) or Tunisia (776). The two least expensive countries in the world? Not the most desirable locations, but definitely cheap: North Korea (779) and Bhutan (780).
You can go wherever you want, but I think I’ll stick with Germany as a desirable expat location. Deutschland has a high standard of living, but still ranks reasonably well with a cost-of-living index of 236.