Hong Kong, Zurich, and Tokyo are among the top 20 most expensive cities in the world according to the latest cost of index rankings published twice annually by Mercer.
With inflation soaring, the cost of living has risen dramatically in most cities around the world, putting added strain on the budgets of its citizens. That’s especially the case when it comes to the housing and rental markets, which in the latter case has experienced dramatic double-digit increases in many areas over the last year.
The combination of high interest rates and inflation is proving to be a double whammy for renters, as higher rates drive more people into the rental market, further exacerbating the effects of inflation. In the United States, which features several of the most expensive cities in the world, the median monthly rent has risen above $2,000 for the first time in history. Some U.S. cities, including Miami and Tampa, have recorded absurd rental price increases of nearly 50% in the less than three years since the pandemic began.
Broad global supply chain challenges have also ratcheted up the cost of living in many areas, particularly in those areas that are heavily reliant on imports. With the cost of goods rising, material shortages impacting the production of items, and many companies also being challenged by labor shortages, they’ve had to jack up the prices on their products to compensate.
The result of all this inflation is that people are increasingly looking for ways to save money, which in some cases means moving to a cheaper area altogether. Before starting the countdown of the most expensive cities on the planet, we asked OpenAI’s artificial intelligence chatbot ChatGPT what some of the top questions are that people have related to cost of living.
Here are six of those questions and the corresponding responses to them from ChatGPT.
Question 1: How can I calculate the cost of living in a specific city or country?
ChatGPT’s Answer: There are several ways to calculate the cost of living in a specific city or country. Some common methods include:
Use a cost of living calculator: There are many online cost of living calculators that allow you to compare the cost of living in different cities or countries. These calculators typically allow you to enter your current location and the location you are considering moving to, and then provide an estimate of the cost of living based on factors such as housing, food, transportation, and other expenses.
Research the cost of specific goods and services: You can also research the cost of specific goods and services in the city or country you are considering moving to. This can help you get a more detailed understanding of the cost of living in that location.
Compare salaries: Another way to calculate the cost of living in a specific location is to compare salaries in that location to those in your current location. This can give you an idea of whether your salary will go further or not in the new location.
Question 2: What are the main factors that contribute to the cost of living in a specific location?
ChatGPT’s Answer: There are several factors that can contribute to the cost of living in a specific location. Some of the main factors include:
Housing costs: Housing costs, including the cost of rent or a mortgage, are often a significant factor in the cost of living in a specific location.
Food costs: The cost of food, including groceries and dining out, can also contribute to the cost of living in a specific location.
Transportation costs: The cost of transportation, including the cost of gas, public transit, and car ownership, can also be a factor in the cost of living in a specific location.
Health care costs: The cost of health care, including insurance premiums and out-of-pocket expenses, can also contribute to the cost of living in a specific location.
Taxes: Taxes, including income tax, sales tax, and property tax, can also affect the cost of living in a specific location.
Utilities: The cost of utilities, such as electricity, gas, and water, can also be a factor in the cost of living in a specific location.
Question 3: How can I budget for living expenses in a new city or country?
ChatGPT’s Answer: To budget for living expenses in a new city or country, you can follow these steps:
Research the cost of living: Use online cost of living calculators or research the cost of specific goods and services in the new location to get an idea of the overall cost of living.
Determine your income: Determine your income in the new location, including any salary or other sources of income.
Create a budget: Use your income and the cost of living information to create a budget for your living expenses in the new location. Be sure to include all of your expected expenses, including housing, food, transportation, and other necessities.
Make adjustments as needed: If your budget is not feasible, you may need to make adjustments to your expenses or income. This might involve finding ways to reduce your expenses, finding additional sources of income, or a combination of both.
Monitor your spending: Once you have created a budget, it is important to monitor your spending to ensure that you are staying within your budget. This can help you avoid overspending and ensure that you have enough money to cover all of your necessary expenses.
Question 4: How does the cost of living affect my salary and purchasing power?
ChatGPT’s Answer: The cost of living can have a significant impact on your salary and purchasing power. If the cost of living in a specific location is high, you may need to earn a higher salary in order to maintain your standard of living. This is because higher living costs mean that you will need to spend more money on necessities such as housing, food, and transportation, which can reduce your overall purchasing power.
On the other hand, if the cost of living in a specific location is low, you may be able to maintain your standard of living on a lower salary. This is because lower living costs mean that you will be able to stretch your income further, allowing you to afford more goods and services with the same amount of money.
Overall, the cost of living can have a significant impact on your salary and purchasing power, and it is important to consider this when deciding where to live or work. By understanding the cost of living in a specific location, you can make informed decisions about your career and financial planning.
Question 5: How can I reduce my cost of living in my current location?
ChatGPT’s Answer: There are several ways you can reduce your cost of living in your current location:
Review your budget: Take a close look at your budget and see where you can cut costs. This might involve reducing your spending on non-essential items or finding ways to save on necessities such as housing, food, and transportation.
Shop around for better prices: Look for ways to save money on your regular expenses, such as by shopping around for the best prices on groceries, household items, and other necessities.
Negotiate your rent or mortgage: If housing is a significant part of your budget, consider negotiating your rent or mortgage to try to get a lower price.
Consider living in a more affordable location: If your current location has a high cost of living, you may be able to reduce your expenses by moving to a more affordable location.
Find ways to increase your income: Another way to reduce your cost of living is to find ways to increase your income, such as by taking on additional work or negotiating a raise or promotion.
Question 6: How do changes in the cost of living impact inflation and the economy?
ChatGPT’s Answer: Changes in the cost of living can impact inflation and the economy in several ways.
Inflation is a measure of the overall increase in the price of goods and services in an economy over time. When the cost of living increases, it can contribute to inflation by causing the prices of goods and services to rise. This can reduce the purchasing power of consumers, as the same amount of money will be able to buy fewer goods and services.
Changes in the cost of living can also impact the economy in other ways. For example, if the cost of living increases significantly, it can reduce consumer spending and slow economic growth. This can occur because consumers have less disposable income to spend on goods and services, which can lead to a slowdown in economic activity.
On the other hand, if the cost of living decreases, it can increase consumer spending and stimulate economic growth. This can occur because consumers have more disposable income to spend on goods and services, which can lead to an increase in economic activity.
Overall, changes in the cost of living can have significant impacts on inflation and the economy, and it is important to carefully monitor these changes in order to understand their effects on economic conditions.
-
Now that we have a better understanding of what factors affect your cost of living and what steps you can take to manage your budget in a high-cost environment, let’s check out which cities are putting the most strain on their citizens pocketbooks by diving into the countdown of the top 20 most expensive cities in the world.
Top 20 Most Expensive Cities in the World
Our Methodology
The following ranking of the most expensive cities in the world is based on Mercer’s exhaustive 2022 cost of living index rankings. The consulting firm evaluates 400+ major cities on a collection of more than 200 different cost-related data points, including the cost of housing, transportation, food, clothing, utilities, and entertainment in each city.
Top 20 Most Expensive Cities in the World
Disclaimer: The following write-ups are generated primarily by ChatGPT and not everything ChatGPT outputs is accurate, so its responses have to be taken with a grain of salt. However, for the most part it’s proven to be a powerful research tool. In some instances the responses have been edited for style and clarity, or additional information has been added by the author.
20. Honolulu, Hawaii, United States
First up on the list of the top 20 most expensive cities in the world is Hawaii’s capital city, Honolulu. Honolulu has a high demand for housing, which has driven up the cost of real estate in the city. The limited availability of land and the expense of building on the island also contributes to its high housing costs.
Many goods and services in Honolulu are imported from the mainland United States, which can make them more expensive due to the added transportation costs. Honolulu is also popular tourist destination, and the cost of living for tourists is often higher than for locals. This can include higher prices for things like hotel rooms, meals, and activities.
19. San Francisco, California, United States
The cost of housing in San Francisco is extremely high compared to other cities. According to data from Zillow, the median home value in San Francisco is $1.3 million, which is significantly higher than the national median of $228,000. San Francisco has a high demand for housing due to its desirable location and strong job market, which has led to a limited supply of housing and rising prices.
Despite the high cost of living, salaries in San Francisco are generally higher than in other cities, which can help offset some of the higher living expenses.
18. Guangzhou, China
The cost of housing in Guangzhou is high compared to other cities in China. According to data from Numbeo, the median price of a one-bedroom apartment in Guangzhou is around $1,200 per month, which is significantly higher than the national average. Guangzhou has a high demand for housing due to its strong economy and growing population, which has led to a limited supply of housing and rising prices.
The overall cost of living in Guangzhou is also relatively high, with the cost of goods and services such as food, transportation, and health care being significantly higher than the national average.
17. Los Angeles, California, United States
Unsurprisingly, Los Angeles is one of the top 20 most expensive cities in the world due to its desirable location, strong job market, and growing population. According to data from Zillow, the median home value in Los Angeles is $826,000, which is significantly higher than the national median of $228,000.
According to data from the U.S. Department of Housing and Urban Development, Los Angeles has the highest number of homeless individuals in the United States, with over 66,000 people experiencing homelessness in the city as of January 2021, primarily due to the high cost of living.
16. Nassau, Bahamas
The cost of living in Nassau, Bahamas can be considered high compared to some other cities and countries. According to data from Numbeo, the cost of living in Nassau is significantly higher than the national average in the United States, with the cost of goods and services such as housing, food, and transportation being significantly higher than the U.S. average.
The high cost of living in Nassau can be attributed to a variety of factors, including the high cost of housing, the high cost of imported goods, and the relatively high salaries that are paid in the city. Additionally, the cost of living in Nassau may be higher due to the city's popularity as a tourist destination, which can drive up the cost of goods and services.
15. London, United Kingdom
Another unsurprising entrant among the Top 20 most expensive cities in the world is London. The cost of housing in London is generally considered to be high, with the average monthly rent for a one-bedroom apartment in the city being around $1,632 per month. Other significant expenses in London include food, transportation, and utility costs, which can add several hundred pounds per month to your living expenses.
14. Seoul, South Korea
According to data from Numbeo, the average monthly cost of living in Seoul for a single person is around $1,295 per month, which includes expenses such as housing, food, transportation, and other necessities. At a glance, that makes it appear significantly cheaper than London, but that analysis doesn’t factor in several other considerations that the Mercer analysis does.
Overall, the cost of living in Seoul can be considered high, and it is important to carefully consider your budget when deciding whether or not to live in the city. It may be necessary to have a higher salary or other sources of income in order to afford the cost of living in Seoul.
13. Shenzhen, China
Shenzhen also looks significantly cheaper than London or several other cities on this list, with the median price of a one-bedroom apartment in Shenzhen being around $616 per month, though that is significantly higher than the national average. The overall cost of living in Shenzhen is also relatively high, with the cost of goods and services such as food, transportation, and healthcare being significantly higher than the national average.
12. Shanghai, China
Shanghai is generally considered to be an expensive city to live in and ranks as one of the Top 20 most expensive cities in the world. According to data from Numbeo, the cost of living in Shanghai is significantly higher than the national average in China, though it is not as high as the cost of living in some other major cities around the world.
The high cost of living in Shanghai can be attributed to a variety of factors, including the high cost of housing, the high cost of imported goods, and the relatively high salaries that are paid in the city. Additionally, the cost of living in Shanghai may be higher due to the city's popularity as a tourist destination, which can drive up the cost of goods and services.
11. Copenhagen, Denmark
According to data from Numbeo, the cost of living in Copenhagen is significantly higher than the national average in Denmark, with the median price of a one-bedroom apartment in Copenhagen being around $1,253 per month, while the cost of goods and services such as housing, food, and transportation are also significantly higher than the Danish average.
10. Beijing, China
Beijing is already the fourth Chinese city to rank among the Top 20 most expensive cities in the world, coming in at tenth. Beijing is the capital of China and has a strong economy, with many job opportunities in various industries. This can be a major attraction for people who want to work and live in the city, driving the population higher and the cost of living along with it.
Beijing also has a more modern infrastructure than many other cities in China, with a well-developed transportation system and access to many amenities such as shopping centers, restaurants, and entertainment venues.
9. Tokyo, Japan
Tokyo is one of the most heavily populated cities in the world, which has contributed to its high cost of living. Tokyo grants its citizens a high quality of life, with a clean environment and access to high-quality healthcare and education. It is also a safe city with a low crime rate, especially given its size.
According to data from Numbeo, the average monthly cost of living in Tokyo for a single person is around $3,110 per month, which includes expenses such as housing, food, transportation, and other necessities.
8. Singapore
Housing costs in Singapore can be quite high, especially in the city center. Transportation costs in Singapore are generally reasonable, with public transportation options such as buses and trains being widely available and relatively affordable. However, the cost of owning and operating a car in Singapore can be high due to the city's high taxes on vehicles, while the cost of other necessities such as healthcare and education can also be relatively high, which contributes to the city-state’s place among the top 20 most expensive cities in the world.
7. New York City, New York, United States
Housing costs in NYC can be prohibitive. Rent for a one-bedroom apartment in the city center can range from around $2,500 to $4,000 per month, while rent for a three-bedroom apartment can range from around $3,500 to $8,000 per month. The cost of purchasing a home in New York City is also relatively high, with the average price for a condo unit in the city center being around $1.5 million. Transportation costs in New York City can also be high, with the cost of a monthly subway pass being around $127 and the cost of a monthly unlimited MetroCard being around $121.
6. Tel Aviv, Israel
Closing out the first part of our list of the top 20 most expensive cities in the world is Tel Aviv, the largest city and financial and technological center of Israel. It is located on the Mediterranean coast in the center of the country and has a population of around 4.3 million people.
Food costs in Tel Aviv can vary significantly depending on where and how you eat, with eating out at restaurants and cafes being relatively expensive, especially in the city center. The cost of other necessities such as healthcare and education can also be relatively high in Tel Aviv.
