When trying to figure out where in the world to live — or visit — it can be helpful to consult a cost of living index like Expatistan. A collection of submitted data by residents and natives, it lists the costs for basic necessities in cities around the world, allowing you to get a good picture of roughly how much it might cost to live there. You can also compare multiple cities around the world (for example, Montreal, where I live, is 17% more expensive to live in than Bogota, Colombia), although the information does not compare the income segregations of these cities, which can have an intense impact on the experience of living there.
Expatistan’s list of cities ranges from most expensive to least expensive to live in. But why are the most expensive cities so expensive? I looked through the top 20 most expensive cities on the list and tried to figure out why a beer in Oslo might cost $16 while one in Kolkata (the lowest city on the list) only costs $1.62. All prices have been converted to US dollars for consistency and understanding.
When a Big Mac combo meal costs $16 and two tickets to the movies is $37, you might think Oslo is the most expensive place to live on Earth...and you'd be right. However, a McDonald's employee makes between $16-24 an hour, and salaried workers make an average monthly wage of $4,800. Also, Norwegians pay one of the highest income taxes in the world, but any tax-paying resident (citizen or not) has access to free healthcare and university education. Not a bad deal, even if gas is $13 a gallon.
It seems almost impossible in the world of cheap Chinese elctronics, but a brand name microwave in Zurich will cost you about $329. A beer in a pub costs about $7, while a mixed drink cocktail runs $19. If alcohol isn't your style, a cappuccino costs $6 (no report on whether that's a large or a small). With take-home pay of almost $5,600 per month for a salaried worker, though, it turns out Switzerland is mostly just bad to visit—budget travelers can expect to drop a minimum of $90-115 a day, and that's camping/hosteling, self-catering, and hitchhiking instead of taking the train or taxis.
Photo: Pedro Szekely
Better hope you don't smoke in London, because a pack of ciggies will cost you $14, while a fancy Italian dinner (with wine) will run you about $110. Rent and council taxes make living in London so prohibitively expensive that one executive figured out it would actually be cheaper to live in Barcelona and commute by plane to his job every day. Relying on sites like Couchsurfing and Airbnb will reduce the wincingly expensive accommodations money you'd be forking out as a budget traveler, though; after that, you can find cheap meals from takeaway shops, and all national museums are free. It's not the cheapest place to visit, but it's much worse to live in.
Photo: Marcel Piek
A tube of toothpaste in Geneva will run you $7 (no news on whether that's Colgate or a fancy organic brand), and buying a small house could easily cost you over a million dollars. While all the countries around it adopted the Euro, Switzerland bowed out, making its currency (the Swiss franc) very strong compared to members of the EU. While dinner for two might run you $70, the ingredients are high quality and well regulated.
Photo: Felix Weizman
Lausanne is a smaller Swiss town in the Alps, so it's both stunningly gorgeous and remarkably vertical: It's situated on a hillside based around a lakefront. It's also quite a small city, only 150,000 people. Its small size and incredible location make it incredibly expensive to live in, and even more expensive to visit or study in—students have to pay school fees, while Swiss residents do not, and are often unable to work as well. You get what you pay for in Lausanne, though: stunning scenery, good quality food, and transportation that runs like...well, a Swiss watch. And since the average monthly salary is over $6,000, that kind of makes up for the cost.
As a country that is basically just one giant city, Singapore was listed as the most expensive city in the world by the Economist Intelligence Unit's 2014 Cost of Living Index. However, those figures reflect only cost of living for expats, not local residents, who make up 75% of Singapore's economy. A brand new Volkswagen Golf will cost over $125,000...but only expats own cars, due to the high cost of gas, taxes, and road fees. Singapore recently set a minimum monthly wage of $787 for cleaners, and a monthly transit pass is $73. If you're visiting and not living there, though, Singapore can be pretty inexpensive (although not as cheap as its neighbouring countries): A hostel dorm should run you about $16-24, street food costs $3-5, and even a beer is pretty cheap in the grand scheme of things, running $8 in a pub or $3.83 in a supermarket.
Photo: Jimmy Mcintyre
New York City
A recent study said you would need 3.5 full-time minimum wage jobs to maintain a two-bedroom apartment in New York (where minimum wage is $9 an hour). If you're not paying housing costs, though, New York can be a cheap city to visit. Their public transportation system is one of the best in the world, and the Broke Millennial's guide to free-ish things to do in NYC is extensive. While New York sports some of the most expensive restaurants you will ever find, you can easily find delicious dim sum in Chinatown for the cost of a newspaper in Paris. Unless you insist on owning (and driving...and parking) a car, New York is likely to be one of your easiest, cheapest travel experiences.
Photo: Trey Ratcliff
While you wouldn't want to buy a 40" flatscreen TV in Stockholm (since it would cost you $783), you can get two movie tickets for $35 and a liter of whole milk is only $1.83. Still, this guy made $100 stretch over five days by couchsurfing, walking instead of taking public transit (which is still cheaper than taxis), and not eating in restaurants or drinking every night. With a cocktail costing about $17, you can save a ton of money in Stockholm by not going to bars, even if you do want to splurge on a restaurant from time to time.
Photo: Brian Colson
Sydney is a vibrant, bustling metropolis with tons to see and do, and a highly sought-after immigration destination. That said, paying $3 for an avocado, $18 for a movie ticket, and up to $24 for a pack of cigarettes (high taxes) can feel like slashing a vein. However, basic retail jobs average about $19 an hour, and a typical annual income is around $45,000. The Australian dollar is also not very strong, and has a tendency to plummet, which makes visiting as a foreigner great, but living there less appealing. That and the endemic racism and sexism.
Photo: Hai Linh Truong
Unlike sexy Sydney, Perth is going through a mining boom, meaning its high cost of living is mostly due to extractions industry folk earning $200,000 a year to operate heavy machinery in the boonies. A lot of these workers are "fly in, fly out," meaning they spend one week in four actually residing in Perth, where they drink heavily in nightclubs and buy expensive consumer electronics. Prices in Perth reflect this sudden influx of dollars, and as this video points out, you wouldn't find it too unreasonable to pay $16 for a pint in your neighbourhood pub.
Photo: Steve Marr
A meal for two in a nice restaurant with coffee and dessert might cost $135, but the Danish capital is most famous for Smørrebrøds, or open-faced sandwiches (mostly herring), which can cost as little as $10 for giant portions. Similarly to other Scandinavian countries, the high cost of living is made up for by high wages, excellent social services (free healthcare!), and cherubically beaming happy Danes everywhere you look. Expats and students who don't speak Danish can find getting a job very difficult, however, so expecting to make your average $1,400 rent on your one-bedroom apartment on savings alone could get old fast. If you're just visiting, same rules apply as any other expensive country: Stay in hostels or couchsurf, self-cater, and try not to go out drinking too often. Although if you do, consider buying your booze and taking it to a park—a beer costs $7 in a pub and only $2.48 in the supermarket.
Photo: Jim Nix
Monthly rent in Hong Kong can soar to over $2,000 for a one-bedroom in the city center, or over $5,000 for a furnished place in a good part of town. The city is very small for the population density (over seven million inhabitants crammed into less than 450 square miles), and some apartment blocks cram thousands of units into tiny square footage. Government control over the housing market also drives up prices, making it a bit of a racket for anyone unlucky enough to need to sign a lease. That said, an inexpensive restaurant might cost about $6 for a meal, while a good old McDonald's combo meal is about $4.25, and, if you book in advance, you can often find passable hostel dorm rooms for $20 a night. Hotels cost about the same as in the West, though, although travel is significantly cheaper due to excellent public transit.
Photo: Trey Ratcliff
The last time I went to Paris (in 2009), a cup of hot chocolate was about $8 in a regular cafe, it was grey and rainy, and everybody looked mournfully chic in their monochromatic outfits. Now, I have no idea what people are wearing, but you can expect to pay $5.85 for a cup of cappuccino in an expat neighbourhood, $15 for a cocktail, and $10 for a bottle of good table wine from a supermarket. Rent in the famous City of Love will run about $1,500 for a one-bedroom in the city centre, although outlying arrondissements can go down to $1,100. The housing crisis means converted storage cupboards, garages, and chambres de bonne (maid's rooms) are being rented illegally as cheap accommodations. Everyday expenses (groceries, utilities, and rent) are very high in cost, although vices like alcohol and tobacco are pretty cheap compared to other European cities. So don't try to rent an apartment, but feel free to get drunk and smoke a pack a day.
San Francisco, California
As part of the tech boom, San Francisco rents can be notoriously expensive, with a study showing the average two-bedroom apartment requires 4.7 full-time minimum wage jobs to maintain—even if two adults living together worked two full-time jobs apiece, they would still need another whole job's worth of money to sustain their lifestyle responsibly at San Francisco's minimum wage of $10.55 an hour. With one of the largest income disparities in the US, it's also not uncommon to see people earning $400,000 a year at Google walking down the street next to vagrants living in cardboard boxes. A meal for two in an expensive restaurant will run you about $100, but you can also find $2 tacos in the Mission. If you're willing to be creative, there's a lot of room to visit (and even live) here inexpensively, although I wouldn't suggest drinking every night when a cocktail costs $10-15 at an upscale bar.
Photo: Patrick Smith
Brisbane has been long touted as the most boring of Australia's capital cities (to which I can only say: Have you ever been to Adelaide?), but it, like most of the land Down Under, sports notoriously high prices on produce, rent, and utilities. Also, its public transit system is the third most expensive in the world—a 3km trip can cost almost $5. Average wage for a full-time worker is about $65,000, however, and since the vast majority of restaurants and pubs in the CBD (that's downtown, to you non-Australians) close at 9pm, you'll save a lot of money by not going on late-night drinking binges. Brisbane is on the Gold Coast, which means easy access to gorgeous beaches, clubbing, and shaggy-haired Aussie surfers only a short drive away. If you have a car, that is, which could cost you $33,000 for a Volkswagen Golf.
Photo: Chris Lofqvist
The Hague, Netherlands
As one of the Netherlands' only two big cities, The Hague is both less touristy and slightly more expensive than Amsterdam. Wages in the Netherlands are higher than Spain and Italy, but lower than England or Germany, with minimum wage set at about $1,360 per month (after taxes and health insurance payments). Given that the average cost of a one-bedroom apartment in city centre is $1,000 a month, it seems clear that anyone earning minimum wage in the Netherlands is not going to be a happy camper. As a visiting guest, though, you can expect to pay $24-40 for a hostel dorm room and around $25 for a single meal in a restaurant. As usual, self-catering will save you a ton, and while a beer in a pub is $3.39 in Amsterdam, it'll run you $5.52 in The Hague.
Photo: NMK Photography
Even though migration to this Scandinavian capital is increasing, housing production is shrinking; most of the land in the city centre is not zoned for residential use, and some companies control access to apartments with monopolies. This means average housing costs can be quite high, even with a median monthly income of $5,500. A one-bedroom downtown (if you can find it) would run you about $1,100 a month, although if you wanted to buy, it could easily cost over $500,000. A bottle of wine from the supermarket will cost you $17 (alcohol is very expensive in Finland) and a dorm room in a hostel might be $40, so it's worth couchsurfing if you plan to stay here for any length of time. A coffee and a pastry only run about $6-8 in a nice cafe, though, so if you're a non-drinker, you're in luck! The weather and high cost, as well as not having a reputation for being a party capital, mean young backpackers often avoid Finland (and head for cheaper, warmer climes like Thailand), so you're less likely to be surrounded by partying 19-year-olds in Helsinki than in, say, London.
While Tokyo is often seen as being a very expensive city by foreign visitors, some things are more expensive (depending on where you're coming from, of course), and some are much cheaper. This article lists the six things foreigners see as being more expensive than back home: restaurants (small portions mean you pay more to eat a lot), fruit (which are considered luxury items), school fees, movie tickets, alcohol (almost twice the cost as in the US and four times what it costs in Germany), and skin care products. Generally, for most of these things, the extra cost means higher quality, and a beer in the supermarket is only $2.71, compared to a cocktail in a downtown club, which would cost about $10. Overwhelmingly, imported "foreign" food—like pizza—is very expensive compared to local street vendors, so expecting to eat the food from home at similar prices will leave you disappointed.
Photo: Chris Robinson
Wellington, New Zealand
As an island with a lot of gorgeous scenery and sheep, New Zealand has to import almost everything...which means prices for everyday items and produce can be quite high. One kilo of tomatoes costs about $5, a pair of new sneakers could average $152, and basic utilities for one month in an apartment could top $150. Far from wages making up for it, jobs in NZ are notoriously difficult to find. and a lot of Kiwis defect to Australia where the employment market is more secure, wages are higher, and they don't need visas to get a foot in the door. Still, Wellington is absolutely beautiful, which explains why people want to keep living there despite the insidious inflation. As a visitor, you would be more likely to feel the crunch in food prices (even self-catering is not much cheaper than restaurants, given the quality of pre=made food and the cost of basic ingredients) and vices like alcohol and tobacco, which could run you $12 for a cocktail and $18 a pack.
Photo: Alexander Xu
According to a study done in 2013, the DC area's median housing prices were 16.78 times the median income, which makes the country's capital even less affordable to live in than New York. Minimum wage in DC is $8.25 an hour, and it has a massive income gap, with the highest paid residents (often US Senators) far outstripping the lowest-paid (often African American or other minority groups). Washington is also a very dangerous city to live in; it rates 16th on the FBI's list of violent crime capitals. Still, you can get two liters of Coca-Cola for $1.60, a cappuccino for $4, and a pack of cigarettes is only likely to cost you around $7. The classism that runs rampant through the streets of Washington means costs for and access to basic necessities might vary wildly depending on neighbourhood; lower-income and minority neighbourhoods often have fewer amenities, less variety in restaurants, and less access to public transit. Keep that in mind when looking for a place to stay.
Photo: Katie Harbath