New York tops ECA's ranking of costliest expat cities

ECA has ranked New York as the world's most expensive city for international assignees, with London in third place in the latest survey.

Geneva moved ahead of London into second, making the Swiss city the most expensive location in Europe in ECA's review of 208 locations worldwide.

The annual ranking showed sharp shifts below the top positions as exchange rates, local inflation and accommodation costs changed the relative expense of assignments across major business centres. Tokyo was among the most notable movers, dropping 19 places to 35th and falling out of the top 30, even though costs in the Japanese capital rose 3.2% in local-currency terms.

The shift reflected weakness in the yen, which reduced the cost of living in Japan for many employers paying expatriate packages in other currencies. That means local prices can rise while overseas organisations face a lower bill once those costs are converted into pounds, euros or dollars.

Global shifts

Swiss cities featured prominently at the top of the table. Geneva ranked second, Zurich fourth and Bern seventh, underlining the effect of a strong franc alongside persistently high prices in Switzerland.

Elsewhere in the top 10, Hong Kong slipped from second to fifth, Tel Aviv rose to sixth, Singapore fell to eighth and Dubai moved to 10th. San Francisco ranked ninth, while Jerusalem climbed nine places to 11th and Reykjavik rose 10 places to 13th.

Oslo recorded one of the largest rises in the top 20, moving up 14 places to 15th. Moscow climbed five places to 16th, while Los Angeles dropped eight places to 20th. Kinshasa entered the top 20 after jumping 26 places to 19th.

ECA linked Kinshasa's rise to stronger mineral export earnings, especially from copper, which supported the Congolese franc amid higher demand for minerals used in clean energy and digital infrastructure. An 11% increase in accommodation costs also pushed the city up the ranking.

Australia rises

Australian cities were among the biggest risers. Sydney climbed 14 places to 28th, while Canberra and Perth each rose 25 places to 58th and 62nd respectively.

The gains were driven by a stronger Australian dollar, rising local prices and higher housing rental costs. Together, those factors made Australian assignments relatively more expensive for companies managing internationally mobile staff.

By contrast, all four Canadian locations in the ranking fell. In the Middle East, Riyadh dropped 17 places to 32nd and Jeddah fell 30 places to 57th, suggesting lower relative costs for assignees despite broader inflationary pressures across parts of the global economy.

Inflation pressure

The survey also pointed to renewed inflation pressure after disruption to energy supplies through the Strait of Hormuz. Average global inflation across ECA's cost-of-living basket rose to 3.7% from 2.8%.

Motoring costs were a notable driver of that increase. Annual motoring inflation rose above 4% as petrol and diesel prices increased sharply, with the effects felt well beyond the Middle East because roughly a quarter of global seaborne oil usually passes through the strait.

The findings come as multinational employers scrutinise the cost of overseas postings more closely. Separate ECA research into expatriate salary management found cost containment had overtaken attracting and retaining talent as the main challenge facing mobility teams since 2022, while cost visibility, policy consistency and administration also climbed the list of concerns.

Steven Kilfedder, Head of Product Analytics at ECA, said exchange rates had played a major role in this year's ranking movements, though the impact varied considerably between locations.

"Yen weakness has pushed Japanese cities down the ranking, while a stronger Australian dollar has helped move Australian cities higher. Elsewhere, shifts in currencies, prices and accommodation costs have produced significant movements in both directions.

"For mobility teams, these results show how international living costs can move very differently from local inflation. The interaction between exchange rates and local costs can produce substantial changes in a location's relative position over the course of a year."

On Tokyo's fall in the ranking, Kilfedder said: "Tokyo hasn't suddenly become cheap, but it has become more affordable for visitors and expats. Costs there are still rising in yen terms, but the yen has weakened enough to more than offset those increases for many international employers. The same apartment or weekly shop can cost more locally while costing less once translated back into pounds, euros or dollars."