The Most Expensive Cities to Live in 2021

Have you ever wondered which city is the most expensive to live in 2021? This year has marked itself in history as a year of uncertainty: supply chain blockages and changing consumer demand has resulted in a rise of cost of living across the globe. 

A breakdown of the most expensive cities 

One city that experienced a rapid change is Israeli Tel Aviv, leaping from 5th to 1st in the Worldwide Cost of Living index released by the Economist Intelligence Unit (EIU). Tel Aviv has climbed to the top of the rankings for the very first time overtaking Paris which shares the second place with Singapore. The EIU explains such a rapid jump to the top by the soaring grocery and transport prices as well as the strength of the Israeli shekel against the US dollar.

Number 4 in the list is Zurich, followed by Hong Kong. New York, Geneva, Copenhagen, Los Angeles and Osaka finish up the top 10. As you can see, European and developed Asian cities seem to be at the top of the list. Meanwhile, the Middle East and African cities are at the bottom of the list. For example, the Syrian city of Damascus steadily holds the bottom spot on the list as the cheapest city in the world as it did last year. Damascus has suffered from severe inflation this year alongside with Venezuelan Caracas and Argentinian Buenos Aires.

How the data was collected

EIU observed 173 cities in the 2021 Worldwide Cost of Living index comparing prices of more than 200 products and services. Survey data is gathered by EIU team of researchers in March and September each year. It is important to note that the index data of different cities is measured against New York City prices, which means that another important factor is the strength of the currency in comparison to the U.S dollar. 

According to EIU prices of goods and services have risen by 3.5% on average in 2021 which is almost twice as much as last year’s 1.9% increase. The pandemic, social restrictions, and global supply-chain problems had a huge role in the huge increase of cost of living, steadily rising oil prices have not helped the matter.

What does the future hold?

Unfortunately, 2022 does not promise a slow-down of rising prices and inflation. With new variants of Covid-19 popping up, continued disruption of supply chains and social restrictions resulting in growing prices are very likely. It seems that not all cities have experienced price growth in 2021 with the bottom of the list having more stagnant and in some cases falling prices. We can expect prices to keep on rising in 2022, due to companies’ increasing wages to counteract inflation. At some point in 2022 central banks are expected to raise interest rates in order to slow down inflation, which should in turn slow down the increasing prices.

Find out where your city ranks on the list here.