2 February 2006

BRUSSELS — While Oslo has edged Tokyo out to become the world's most expensive city, living in Brussels does not come cheap either.

In the latest Economist Intelligence Unit (EIU) worldwide cost of living report, Brussels is more expensive than many other European cities. It is also more expensive than New York.

Brussels rose two places this year and is ranked as the 21st most expensive city in the world, with a score of 105. It is equal with Stockholm and ranks above Amsterdam (23rd).

Europe gets costlier

Oslo's rise to become the costliest city from its ranking of third city last year reflects a much wider increase in the relative cost of living across Europe according to the EIU report.

Eight out of the 10 most expensive cities in the survey are now based in Europe, with most of them falling into the category of a developed Western European city. Paris ranks at number 4, Copenhagen at 6 and London at 7.

And while Switzerland's Zurich ranks at 8 and Geneva at 9, they at least have the advantage of topping of the list of the 50 best cities for expat workers to live in according to a 2005 quality of living survey.

Relatively cheap cities in Europe are Lisbon and Prague.

Prices rise slowly in the East

Although Moscow was the only city from Eastern Europe ranking in the top 30 most expensive cities, the transition economies are seeing advances in the relative cost of living which the report links to entry into the EU or accession talks.

Exchange rate and price movement are the two main reasons why a city's cost of living index will change over time, and the changes in Europe have mostly been driven by the long-term underperformance of the dollar.

Iceland's Reykjavik had the largest proportional rise in the cost of living, gaining 19 percentage points over New York, a city which is taken as a base index of 100 by the EIU to allow comparisons.

Only two cities across Europe saw a decline in the relative cost of living. Tashkent in Uzbekistan fell 12 places to rank at 117, making it the cheapest city in the region alongside Kazakhstan's Almaty.

Living costs dropping in Asia
 
Since the Yuan broke free from the US dollar, Chinese cities have experienced a relative fall in the ranking, as increased investment opens up pricing competition and lowers tariffs on branded goods in larger urban centres according to the EIU.

Sao Paulo and Seoul break ranks

Brazilian cities Rio de Janeiro and Sao Paulo showed the steepest rises in the cost of living of all the cities surveyed. Each city jumped 22 places to joint 87th on the back of economic recovery across the region.

In North America, Canadian cities are now more expensive than all but the largest cities surveyed in the US.

Australia and New Zealand both rose in the ranks due to buoyant exchange rates and rising petrol prices and Seoul in South Korea overtook Hong Kong as the most expensive city in Southeast Asia after Tokyo and Osaka.

The end of an era: a little history

Oslo overtaking Tokyo as the world's costliest city can be seen as marking an end of an era which started 14 years ago.

In 1991, the year of the launch of operation Desert Storm and the year which closed with the official dissolution of the Soviet Union, Tehran was ranked as the world's most expensive city. Tokyo was ranked as the second most expensive destination.

Due to the events which followed, revaluations rapidly sent Tehran to the bottom of the city rankings and Tokyo rose to top ranking city where it has remained until now.

Six months ago, Oslo — basking in Norway's strong economic growth — overtook Osaka as the second most expensive city in the ranking, making it only a matter of time before Tokyo was also overtaken.

Tehran still languishes at the bottom of the listing.

Top ten ranking cities
Autumn 2005

Rank (last year) city, country WCOL index

1 (3)    Oslo, Norway - 140
2 (1)    Tokyo, Japan  -  136
3 (8)    Reykjavik, Iceland  -  135
4 (4)    Osaka, Kobe, Japan - 130
4 (2)    Paris, France -  130
6 (5)    Copenhagen, Denmark - 127
7 (7)    London, UK -125
8 (6)    Zurich, Switzerland - 123
9 (8)    Geneva, Switzerland - 116
10 (10) Helsinki, Finland - 115

Bottom five ranking cities
Autumn 2005

Rank (last year) city, country WCOL index

124 (121)  Asuncion, Paraguay - 45
124 (124)  Mumbai, India - 45
126 (122)  Karachi, Pakistan - 43
127 (125)  Manila Philippines - 39
131 (131)  Tehran, Iran - 33

*New York = 100

Source: Economist Intelligence Unit

[Copyright Expatica News 2006]

Subject: Belgian news