Wellington, New Zealand, is ranked first among the world’s 47 major cities in Mapping the World’s Prices 2017, published by Deutsche Bank Research.
The Report’s Methodology
The report accounts for the expenses consumers have to pay for rent, goods and services, be they permanent residents or tourists, in various cities. The information is, therefore, hugely valuable for both company employees considering relocation as well as anyone wondering where is best to go on vacation. Included in the data are the rent of a small apartment, costs of urban transport or taxis, cinema tickets, gym passes, and hotel prices.
More interestingly, the price information is supplemented with data on safety, access to healthcare, time spent on transportation, air pollution and climate quality. Consequently, the report resembles a more general quality of life index. The authors of the report contend they are aware of the price weaknesses of comparisons that should take into account purchasing power parities, but this measure is not always desired by the average consumer.
Consumers are generally content with knowing whether they are spending more or less to buy comparable products or services. In the ranking, for ease of comparison, all prices are converted to dollars, and the point of reference is often the US, which was, until a few years ago, considered as a country of relatively modest living costs – by Western standards anyway.
The Top Three
Wellington ranked first in terms of quality of life, above all thanks to its almost pristine air, friendly climate and ease of travel around the city. The cost of living there is high, but it is bad news for tourists because residents can enjoy the high purchasing power of their portfolios, which also affects real estate prices in relation to their income.
Coming second and third, respectively, are Edinburgh and Vienna, where you can enjoy clean air and convenient travel around the city. The purchasing power of the inhabitants of these two cities is lower, however, but residents can take satisfaction from their respective healthcare policies.
A Hidden Gem?
Warsaw, Poland’s capital, is ranked 23rd among major cities in the world. What distinguishes it is the relatively low cost of living (6th place) and the high level of security (8th place). Additionally, Warsaw does not rank particularly low in terms of convenience of communication (18th place).
For cities geographically close to Poland, only Berlin (12th in the overall ranking) and Prague (19th place) rank higher. Many prestigious European and non-European metropolitan areas have been ranked such as Brussels, New York, Paris, London, Moscow or Beijing.
In terms of cost of renting two bedroom apartment, Warsaw is a rather cheap city, where it costs, on average, $864 per month, which is slightly cheaper than Madrid or Berlin. The cost of renting the same size apartment in Dublin or Amsterdam is roughly double that. In London, New York, Hong Kong or San Francisco one can easily expect to pay four times the going rate in Warsaw.
The Cost of Goods
Buying a car (VW Golf, standard equipment) costs the least in India (New Delhi below $ 13,000) and Mexico. In Warsaw, the purchase cost is estimated at $20,600 dollars, whereas in Copenhagen, notorious for its high prices, the same care costs over $48,000. However, looking east, a VW Golf costs an unfathomable $90,500 in Singapore.
When shopping for smaller items, there are also huge differences across the globe. The iPhone 7, for instance, costs $1200 in Turkey, which is up 47% from its US price of $815.
Bang for the Buck
Perhaps unsurprisingly, the most expensive place to live in the world is Zurich, Switzerland. Oslo and Copenhagen, as well as New York and San Francisco, are not far behind. The cheapest life is in Indian cities such as Bangalore, New Delhi and Mumbai, but in other categories, these cities fare much worse.
As for a weekend getaway, the cheapest destination is Istanbul, where the standard cost is around $740. With a lean wallet, it is best to avoid Milan, which will set one back around $2092, mainly due to the high price of hotels.