Published March 11, 2009

Strong yen makes Tokyo, Osaka world's most expensive cities

Sept's heavyweights Oslo, Paris tumble in EIU's Feb survey

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(SINGAPORE) The strong yen has made Tokyo and Osaka the world's most expensive cities for expatriates while sharp currency declines lowered living costs in Australia and New Zealand, a survey has showed.

Because the yuan is tightly linked to the US dollar, costs in Chinese cities increased as other currencies tumbled against the greenback, said an Economist Intelligence Unit (EIU) survey received here late Monday.

Oslo and Paris were the world's costliest cities in the previous EIU survey.

Shanghai, with a cost of living only 2 per cent cheaper than New York's, is currently more expensive than Sydney, said the survey, carried out last month.

The previous survey was carried out in September last year, just as a housing mortgage mess in the United States was unravelling into a full-blown global financial and economic crisis.

Seven of the world's 10 most expensive cities in the latest survey are in Europe, with Singapore joining Tokyo and Osaka as the only Asian cities on the list.

'Two factors drive the relative cost of living: local prices and exchange rates,' said Jon Copestake, the editor of the report.

'Normally, our ranking of cities by cost of living is relatively stable, but . . . the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities.'

In the survey, EIU compared the cost of products and services in 140 cities. It is aimed at helping companies calculate allowances for executives and their families being sent overseas.

France's capital Paris is now the world's third-most expensive city, down from No 2 in the EIU's previous survey, followed by Copenhagen and former No 1 Oslo.

Zurich was in sixth place, while Frankfurt and Helsinki tied in seventh place, followed by Geneva.

'The decline in European currencies, most notably the euro, sterling and Norwegian krone, has driven a significant weakening in the relative cost of living for many European cities,' it said.

Singapore, South-east Asia's most advanced economy, was ranked the 10th most expensive city worldwide, followed by Hong Kong, which rose to 11th place from 28th.

Shanghai rose to 29th place from 45th, while Beijing rose to 36th place from 58th. Sydney fell to 35th, down from 17th.

Thailand's capital, Bangkok, is No 72 in the worldwide rankings, but is the second most-expensive city in South-east Asia after Singapore.

Kuala Lumpur in Malaysia is No 90 worldwide and No 3 in South-east Asia.

Of the world's 10 least expensive cities, five are from Asia - Manila, Kathmandu, New Delhi, Mumbai and Karachi.

The cost of living in Manila is half that of New York, while that of Karachi, the cheapest city in the survey, is just over one-third, EIU said. -- AFP