Auckland and Wellington surge in cost of living survey

Auckland and Wellington have surged in the rankings of a global cost of living survey.

Both cities took a huge, 62-place leap up fund manager Mercer’s Cost of Living Survey to the 56th (Auckland) and 74th (Wellington) placed rankings.

The rise up the list by New Zealand cities follows a large increase in accommodation cost and demand, teamed with a stronger New Zealand dollar.

Mercer's survey helps multinational companies and governments determine compensation allowances for their expatriate employees. 

Survey compiler Nathalie Constantin-Metral, a principal at Mercer, says cities in New Zealand and Australia took some of the biggest leaps on the survey this year as currencies strengthened against the US dollar.

“Demand for rental properties has also increased significantly in all the Australian cities we rank. Coupled with very limited availability, the result has been very tight markets and increased prices.”

Strengthening of the Australian dollar also pushed cities across the Tasman higher up the list from last year.

Sydney climbed three places to 11 and Melbourne climbed six places to 15.

The other four Australian cities surveyed had higher rises: Perth (19), Canberra (23) both jumped 11 places; Brisbane (24) rose seven places, and Adelaide (27) is up 19 places.

Thee are now three surveyed Australian cities in the survey’s top 20 spots.

Tokyo is now the most expensive city for expatriates to live in, pushing Luanda, Angola, down to the second spot.

Osaka is in third position, up three places from last year. Moscow and Geneva remain in the fourth and fifth positions.

Karachi, Pakistan, is ranked as the world’s lease expensive city for expatriates in 214th place. That means its cost of living is less than one-third as expensive as Tokyo.

Recent world events including economic and political upheavals have affected the rankings for many regions through currency fluctuations, inflation and volatility in accommodation prices.

Mercer’s survey covers 214 cities across five continents and measures the comparative cost of more than 200 items including transport, food, clothing, household goods, entertainment and the cost of housing.

New York, in 33rd place, is used as the base city and all others are compared against it. Currency movements are measured against the US dollar.

Against New York, most European cities saw a decline in the cost of living over the last year.

“Deploying expatriate employees is becoming n increasingly important aspect of multinational companies’ business strategy, including expansion.

“But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages,” says Ms Constantin-Metral.

“Making sure salaries adequately reflect the differences in cost of living to the employees home country is important in order to attract and retain the right talent where companies need them.”