International Cost of Living Differences - Major Cities
In August 2015 UBS completed an update of their "Prices and Earnings" Survey - comparing prices and income levels across a number of major cities in the world. The results are summarised below, and compare the cost of living in the major cities, including rental costs, and in the chart we have re-based the comparison on Sydney, rather than New York. The chart illustrates the cost of living in a variety of world cities compared to Sydney; hence New York is 38% more expensive than Sydney, and Amsterdam 23% less expensive.
These figures should only be seen as broadly indicative of price differentials, for the following reasons:
1. They are very dependent upon foreign currency movements - for example, the relative cost of living in Sydney will have declined markedly over the first 6 months of 2015 with the weakening of the AUD against the USD during that period.
2. The composition of the reference basket of goods and services used in the survey represents the spending habits of a three-person European family and therefore doesn't really reflect the costs for individuals or those in larger family units. These indices are difficult to put together in a constructive, balanced fashion - access to high resolution figures is really available only to large corporations through consultancies.The selection of a "European" benchmark also means that the costs of food can sometimes be exaggerated if you adapt to local norms.
3. We have a very real concern about the accuracy of the housing costs in these types of surveys, and more particularly whether they reflect expatriate, rather than local requirements. Expatriates will choose housing with reference to certain amenities and concerns - proximity to schools, (good) hospitals, airports, shopping and security - which invariably lead to (relatively) high housing costs. This comment applies to many developing countries, where access to good quality housing in the "right" locations is invariably hard to acquire and expensive by any measure.