A list of the world’s most expensive cities for 2022 has been announced amid Australia’s skyrocketing cost of living.
One Australian capital has climbed the global ladder while all others have fallen, but experts say that does little to meet the true cost of living for Australians.
The ECA’s international cost of living ranking combines their cost of living and expat housing data.
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All Australian cities are still, perhaps unsurprisingly, in the top 100.
Cost comparison research covers everything from accommodation and household goods to leisure services, public transport, clothing and utilities for people living abroad in Australia.
It also looks at the cost of everyday groceries like milk, cooking oil and coffee.
The ranking took into account 207 cities in 120 countries and territories in scope.
However, University of Queensland economics professor John Quiggin told 7NEWS.com.au the rankings did not adequately reflect the cost of living for Australians.
“Inflation has increased significantly in Australia, as it has in many countries,” Steven Kilfedder, production manager for ECA International, told 7NEWS.com.au.
“But the weak Australian dollar has made the country a bit cheaper for visitors than before, which explains the slight drop in most cities’ rankings.”
“Sydney bucked the trend, but only because other cities around it fell.”
This year, Osaka was ranked 40th, Paris 42nd and Bangkok 47th – all of these global epicenters falling more than 10 places to become cheaper than Sydney.
Sydney was ranked the 39th most expensive city in the world in 2022.
In 2021, Sydney was ranked the 40th most expensive city in the world, but that spot has now been usurped by Osaka.
Canberra was ranked the 55th most expensive city in the world in 2022.
It’s a move down the ranks by three places since 2021, when it stood at 52.
Melbourne was ranked the 56th most expensive city in the world in 2022.
That’s a five-spot downward move since 2021.
The Victorian capital sits just below Canberra for the second year in a row, when it stood at 51.
Perth was ranked the 76th most expensive city in the world in 2022.
That’s a two-spot downward move since 2021, when it stood at 74.
The world top 20
1. Hong Kong, Hong Kong
2. New York, USA
3. Geneva, Switzerland
4. London, UK
5. Tokyo, Japan
6. Tel Aviv, Israel
7. Zurich, Switzerland
8. Shanghai, China
9. Guangzhou, China
10. Seoul, Republic of Korea
11. San Francisco, USA
12. Shenzhen, China
13. Singapore, Singapore
14. Beijing, China
15. Jerusalem, Israel
16. Bern, Switzerland
17. Yokohama, Japan
18. Copenhagen, Denmark
19. Oslo, Norway
20. Taipei, Taiwan
A different experience for Australians
The global ranking aims to detail the affordability of cities, but Quiggin told 7NEWS.com.au it is based on people who in many cases are “presumably receiving international salaries motivated by international movement”.
He says ‘if Sydney moves from one place it doesn’t say much, it could just be a quirk in the data’ but added the ranking works to ‘remind us of the issues we face’ .
“We’re seeing relatively good results for most Australian cities, with the exception of Sydney, at a time when that’s not the actual experience of Australian households.”
Recent price hikes and inflation are not unique to Australia, but Quiggin says rising energy and rental costs amid stagnant wage growth are key drivers of the crisis. the financial accessibility of the country.
“Talking about the cost of living is wrong, what we need to focus on is the purchasing power of wages,” he said.
“What we’ve seen are these big rent increases, at a time when wages have essentially remained almost flat,” Quiggin said.
While Sydney may have been the only Australian city to make it onto the list of most expensive cities, Quiggin says the real issue is the purchasing power of income and it “isn’t limited to Sydney at all. “.
“We are really seeing a housing affordability crisis, which is currently focused on the rental sector.”
“Inflation in Australia has increased significantly,” Reserve Bank of Australia Governor Philip Lowe said in a statement on Tuesday announcing the RBA board’s decision to raise the cash rate by 50 basis points at 0.85%.
“Rising electricity and gas prices and recent increases in petrol prices mean that in the short term inflation is likely to be higher than expected a month ago.”
He said, however, that there is “evidence that wage growth is accelerating” and that it is now “appropriate to start the process of normalizing monetary conditions”.
The cost of living around the world
External factors such as politics and international conflicts can also play a role in the global ranking.
Russia’s invasion of Ukraine and the accompanying sanctions imposed by many countries caused Moscow to come in at 62nd and St. Petersburg at 147th.
The cost of fuel has risen in almost every listed location, made worse by the war in Ukraine, in what the ECA reported as a 37% increase globally.
The Australian Petroleum Institute said the national average petrol price fell 3.1 cents last week to 196.9 cents per litre, following six weeks of consecutive increases.
“Fuel is one of the major contributors to the rising cost of living globally, as demand for fuel has outstripped supply,” the ECA report said.
“St Petersburg in Russia saw the smallest price increase in Europe, rising just 10% despite sweeping sanctions in place – thanks to its domestic oil supply and refining capacity.”
Tel Aviv, which climbed one spot to 6th in the rankings, has “a thriving tech scene, which has been turbocharged by the pandemic and the shift to remote working,” the report said.
He said this in turn attracted multinational corporations and significant foreign investment – all of which contributed to the strength of its currency, making it increasingly expensive for expats.
It’s safe to call Asia the most expensive continent on the list, with five cities – Hong Kong, Tokyo, Shanghai, Guangzhou and Seoul – making it into the top 10.
Asia also happens to be the continent with the fastest growing city on the overall list after a 23-place jump by Colombo, Sri Lanka’s main metropolis, from 162 to 149.
Tokyo hit its highest inflation rate in three decades, but the Japanese capital still fell below London to 5th place in the world rankings due to the combination of the yen remaining weaker than other major currencies. and relatively stable rental costs.
The strength of each nation’s currency played a major role in the rankings, as visitor conversion rates were taken into account.
The Australian dollar is currently quite weak, which has contributed to the downward movement in the rankings of most cities in the country.
“It’s typical to see US dollar strength in times of general chaos…people tend to prefer US dollar assets,” Quiggin told 7NEWS.com.au.
He also noted that at the time of the ECA’s research, Australia’s exchange rate and the rest of the world were at zero, but Australia’s historical tendency to have higher interest rates generally makes the currency more strong.
“Almost all major cities in the euro area have seen their rankings drop this year, with the euro performing worse over the past 12 months than the US dollar,” explained Lee Quane, ECA’s regional director for the Asia.
Europe’s most expensive city, Geneva, which ranked third after Hong Kong and New York, uses the Swiss franc instead of the euro.