EIU’s expensive cities survey: How London, Mumbai, Delhi, Manchester fare?

Tuesday, 5 February 2013 - 6:53am India News Bulletin Desk

Europe was long known to be the home for world’s most expensive cities but not anymore. Euro zone crisis, recession and growth in emerging markets have made European cities relatively cheaper, showed Economist Intelligence Unit’s Worldwide Cost of Living survey.

Japan capital Tokyo has once again become the world's most expensive city, a title that it has held for 14 of the last 20 years, the study showed. Japanese city Osaka ranked second in the list

London is 16th most expensive city while Mumbai and Delhi are least expensive: EIU survey

Image: Wikimedia Commons (Jiong Sheng)

London ranked 16th and Manchester -- the only other UK city in the survey -- ranked 47th. India’s Mumbai joined Pakistan’s Karachi to become the world’s cheapest cities.

European cities were down by an average of 13% in the latest study but cities such as Oslo, Zurich, Paris and Geneva remained in the top ten most expensive cities in the world.

Zurich which was the world's costliest city last year, has seen an equally dramatic decline this year – it is now seventh in the list. A relative cost of living decline of 39% for Zurich was the steepest index fall in the survey. The fall in Zurich's cost of living meant that, despite seeing an index decline of 14 percentage points itself

Movement has been much more modest in London and Manchester, the UK cities included in the survey, according to EIU.

In the last 12 months London has moved up one place to occupy 16th rank in the list featuring more than 140 cities. Northern city Manchester rose more dramatically to 47th position from 53rd position. Despite these recent rises, both cities represent relative bargains compared to five years ago, when London was the third most expensive city and Manchester was 28th, the publisher said.

"The cost of living in Europe has seen relative declines thanks to economic austerity and currency fears," said Jon Copestake, editor of the report. The index points for cities are calculated based on the individual prices of 160 items – ranging from food, toiletries and clothing, to domestic help, transport, and utility bills — in each city.

The Canadian city of Vancouver, ranked 21st, remained the most expensive location in North America.

Paradox in Asia – home to most expensive and cheapest cities

Although Tokyo's position is little surprise, the increased prominence of Asian cities among the most expensive is becoming noticeable.

In particular, Australian cities have been rising quickly. The current survey sees Sydney rated as third and Melbourne as fifth most expensive cities surveyed.

Other cities in the top ten include Singapore and the Venezuelan city of Caracas.

Although the presence of the Venezuelan capital in the top ten may come as a surprise it is entirely due to artificially high exchange rate controls; if alternative parallel exchange rates were applied, Caracas would be on a par with the cheapest cities surveyed, according to the report’s author.

Despite being home to more than half of world’s most expensive cities, Asia is also home to six of the ten cheapest.

Five of the bottom ten (and six of the bottom eleven) cities hail from the Indian subcontinent (defined as India, Pakistan, Bangladesh, Nepal and Sri Lanka). Mumbai and Karachi are the joint cheapest locations in the survey, with indices of just 44 when New York is set as 100.

Indian capital city New Delhi, Nepalese capital of Kathmandu and Algerian capital of Algiers have all featured in the cheapest cities. While cost of living in India is rising, the average per capita income is very low which has kept the prices low.

Other cities in the bottom ten include Romanian capital of Bucharest, Sri Lanka’s Colombo, Panama City, Jeddah from Saudi Arabia, and Iranian capital Tehran.