The World's Most Expensive Places to Live 2012

Europe’s debt crisis, slowing growth in the U.S. and worries about a hard landing in China: Even if you’ve kept your job this past year, you’ve probably had plenty to worry about. But how about the rising cost of living?
According to a new report from human resources firm Mercer Consulting, the cost of living in North American, Asian and African cities has been rising this past year, despite the global slowdown.
The study looked at 214 cities worldwide and used New York City as the benchmark. Mercer’s annual cost of living survey is used by multinational companies to determine compensation for their expatriate employees around the world. The rankings are based on the cost of more than 200 items in each location including housing, transportation, food, clothing and entertainment.

 1.Tokyo is the most expensive place to live in the world for expatriates and is one of three Japanese cities to make the top 10 list this year. The city has risen from the number two spot last year and has been ranked either first or second for the past five years. While the cost of renting in Asia’s most expensive city has remained relatively the same, the cost of other goods like a cup of coffee, fuel and a fast-food meal has gone up over the past year. By comparison, Tokyo is about one-third more expensive than Karachi, which is the least expensive city for expats among the 214 cities surveyed by Mercer. As Japan’s most important economic center, Tokyo is the most desirable place for expats to live in. But the city's real estate market is expected to be hit by shrinking demand from expatriates in 2012 due to corporate cost-cutting and downsizing, according to Knight Frank.

Monthly Rent, Luxury 2 Bedroom: $4,848 
Cup of Coffee: $8.29 
One Gallon of Gasoline: $7.34 
Daily International Newspaper: $6.38 
Fast-Food Meal: $8.29 

2. Luanda, Angola Luanda, the capital of Africa’s second largest oil producer, has fallen to second place this year from the number one spot it has held since 2010. An oil boom has helped Angola become the third-largest economy in sub-Saharan Africa after South Africa and Nigeria. Crude oil sales account for over 95 percent of its export revenue, and the government expects GDP growth of 12.8 percent in 2012.

The most costly expense in Luanda is renting property, similar to number 8th ranked N’Djamena. Despite the average monthly cost of renting a luxury two-bedroom apartment falling $500 compared to last year, it still remains high at $6,500. Consumer inflation in Angola was more than 11 percent year-on-year in March.
The country is the largest recipient of foreign direct investment in sub-Saharan Africa with inflows of nearly $10 billion in 2010, according to the United Nations Conference on Trade and Development (UNCTAD). Its main overseas investors include China, Portugal, Brazil and the U.S. and expatriates from these countries are sent to oversee local operations in Luanda.

Monthly Rent, Luxury 2 Bedroom: $6,500 
Cup of Coffee: $3.90 
One Gallon of Gasoline: $2.38 
Daily International Newspaper: $5.46 
Fast-Food Meal: $19.94* 

3. Osaka, Japan
Osaka, Japan’s second largest city, has moved up three spots this year from sixth in 2011 and 2010.

Known as an important commercial center for Japan, about 1.1 million people commute into the city during the day, according to the Japanese Statistics Bureau. The city has high rental prices because of its dense population, a limited amount of accommodation and high expatriate demand. A relatively strong yen has also heightened the cost of living for expatriates. The cost of buying daily goods like a cup of coffee, fuel, an international newspaper and fast food have all gone up from last year.
Osaka is also a key industrial hub and home to nearly 44,000 manufacturers, which creates added pressure on resources. But a strong yen and an aging labor pool have hit the once mighty industrial hub in recent decades. The city has seen a decline in manufacturing with three firms closing shop every day since the peak year of 1983.

Monthly Rent, Luxury 2 Bedroom: $3,062 
Cup of Coffee: $7.02 
One Gallon of Gasoline: $6.85 
Daily International Newspaper: $6.38 
Fast-Food Meal: $8.29 

4. Moscow, Russia Moscow is the most expensive city in Europe for expatriates and has ranked fourth globally since 2010.

Despite widespread concerns over corruption, red tape, pollution and growing traffic congestion, Moscow’s place as Russia’s main political and business capital makes it the top destination for expat workers. The city attracts more investment than other Russian cities and accounts for about a quarter of the country’s $1.5 trillion economy. Daily issues like power outages and safety also drive up the cost of living for foreigners.
The rising cost of renting property is the most substantial increase in living costs for 2012, according to Mercer, with a luxury two-bedroom apartment going up by $200 compared to last year. Demand for luxury property in Moscow is also high because of growing wealth from the country’s oil and commodities boom. Moscow is home to the most billionaires in the world at 79, according to Forbes.

Monthly Rent, Luxury 2 Bedroom: $4,200 
Cup of Coffee: $8.37 
One Gallon of Gasoline: $3.67 
Daily International Newspaper: $9.78 
Fast-Food Meal: $6.70