EUKN - European Urban Knowledge Network - Oslo, London & Copenhagen most expensive cities in the world

Oslo, London & Copenhagen most expensive cities in the world

Introduction

Costs and income in cities around the world greatly vary. In 2006, UBS last published a comparison of purchasing power around the globe. In March 2008, an updated version of this report was released. From the 2008 benchmark it becomes clear that Oslo, London and Copenhagen are still the most expensive cities for visitors in the world. Also Dublin is quickly moving up the list and is now even ahead of Zurich. Eurozone cities are becoming relatively more expensive too. In comparison to Hong Kong for example, Barcelona used to be similar costly in 2006. Today however, the Catalan port is 22 percent more expensive than the Chinese one. This UBS report compares 71 cities around the world on the basis of the cost of a weighted shopping basket geared to Western European consumer habits containing 122 goods and services. In that way it gives some interesting insights into the living costs and the purchasing power of the cities surveyed.

Description

According to this benchmark survery, Oslo, London and Copenhagen have remained the most expensive cities for visitors since 2006. However, one city is challenging the top of the list. In 2005, Dublin was the thirteenth most expensive city surveyed; now it ranks number four, just in front of Zurich. Other cities notorious for their high prices have ceded their places. In the US, prices have fallen relative to the other cities. The US dollar’s sharp depreciation has made New York a much more affordable place for European shoppers. London is now 26% more expensive.

Eurozone cities are even more expensive. In 2006, Barcelona and Hong Kong were similarly costly. Now the Catalonian port city is 22% more expensive than the Chinese one. The cheapest cities are in South Asia and South America. Buenos Aires is nearly as expensive as Mumbai. The depreciation of the Indonesian rupiah make both countries attractive tourist destinations.

When rents are included, the ranking is reshuffled. New York is the fifth most expensive city to live in, after London, Oslo, Dublin and Copenhagen. Life for London renters is 23% costlier than for Zurich’s tenants, and living in Mumbai’s is about as expensive as in Mexico City. One reason for this discrepancy is surely the differences in developing cities’ price levels. The basket of goods that was used in this study is biased toward Western European consumer standards. Only the cost of Western-style accommodations in Mumbai were considered, which may be very high compared with average local prices. The local market for such housing is smaller, too.

Methodology

Standardized price and earnings surveys were carried out in 71 cities around the world in early 2006. A number of independent agencies were involved. A questionnaire was sent out on 122 goods and services and 120 data points on wages, deductions and working hours for 14 different professions. A total of more than 30,000 data entries were collected and analyzed. The surveys were conducted by local UBS employees, correspondent banks, consumer organizations and chambers of commerce as well as by universities, members of the student organization AIESEC and selected individuals.

Conclusions

The top 10 most expensive cities excluding rent:

1. Oslo
2. Copenhagen
3. London
4. Dublin
5. Zurich
6. Stockholm
7. Helsinki
8. Geneva
9. Paris
10. Vienna

The top 10 most expensive cities including rent:

1. London
2. Oslo
3. Dublin
4. Copenhagen
5. New York
6. Zurich
7. Stockholm
8. Helsinki
9. Geneva
10. Paris

Contact info

UBS AG, Wealth Management Research
Zurich
sh-prices-earnings@ubs.com

Publication date

/03/2008

Researcher

UBS AG, Wealth Management Research

Links

Click here to visit the UBS website

Download the 2008 UBS report 'Prices & Earnings' (PDF, Eng, 509 kB)

Document type

research

Themes

Urban Policy > Economy knowledge & employment

Keywords

Urban economy