The World's Two Most Expensive Cities For Expats Are Located On This Surprising Continent

Tyler Durden's picture




 

America, Europe or Asia: those are the usual continental suspects which come to mind when asked where the world's most expensive cities for expats are located. They are also incorrect.

According to the most recent study conducted by Mercer consultants not only the world's most expensive city, but also the second most expensive place for foreigners to live at this moment, are located in the one continent which we predicted two years ago, would become a Chinese colonial feeding ground. Africa.

According to the FT, "the tight supply of international standard housing in Luanda has put the Angolan capital top of the list of the most expensive cities in the world, according to a survey by consultants Mercer of the costs of living abroad. It held the same position last year as the oil boom continues to suck in expats.The rush for hydrocarbons has similarly pushed N’Djamena, Chad’s largest city, up into second place as some of the cities more commonly associated with the high cost of living have dropped down the rankings."

More:

Moscow has fallen from second to ninth, while Tokyo slips four places to seventh. In the absence of any large inflationary pressures, the biggest single reason for the realignment over the last year – Mercer compared the cost of a basket of items from housing to the a cup of coffee in February this year to the same month in 2013 – is exchange rates.

 

Most of the movements in the rankings this year have been driven by the movement of the local currency against the US dollar,” explains Kate Fitzpatrick, a consultant at Mercer.

 

The survey uses New York as its base city to compile the rankings and the relative strength of the US currency has had a big impact on the league table, she says.

Some examples: A cup of coffee in Moscow and Tokyo will still set you back more than $6, compared to just $1.81 inNew York, the 17 per cent jump in the value of the dollar against the Russian ruble and its 10 per cent rise against the yen, rather distorts the picture.

As for just renting, Hong Kong moved up to third in the rankings, from sixth last year, lifted by its high rental prices with a two bedroom international standard apartment costing $6,960 per month. Australia also looks more alluring given the fall of its currency against the greenback. Sydney has tumbled out of the world’s top 10, falling from ninth to 26th place in the rankings, while Melbourne slipped from the 16th spot all the way down to number 33.

It's not all doom and gloom for expats. One can live cheaply in, for example, Pakistan:

The cheapest place for a company to send its staff remains Karachi ranked 211th, because of the very low cost of accommodation. Rent for a two bedroom unfurnished apartment of “international standards” in Pakistan’s largest city costs just $304 per month, compared to $6,600 in Luanda.

Somehow we doubt this "value trap" will have much of an impact on expat's residency plans.

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Fri, 07/11/2014 - 11:00 | 4947082 NoDebt
NoDebt's picture

I dunno...... I'm gonna have to run this past Simon Black to see if their banks are safe places to put my money first.

Fri, 07/11/2014 - 11:16 | 4947128 Manthong
Manthong's picture

Given the characteristics of the indigenous populations I doubt that the Chinese will have any more success colonizing than any of the other colonialists in the last 500 years.

Exploiting, yes.. colonizing , no.

And then there are those little issues of HIV, Ebola and only God knows what else.

Fri, 07/11/2014 - 11:22 | 4947151 BlindMonkey
BlindMonkey's picture

They can do the Roman model of cinization and move their population to the new land to exploit. They have plenty and that would allow them to have a stable supy of qualified workers on site.

Too bad that would be hardly a benefit for the Africans but I don't see them becoming anything other than an easily manipulated pushover anytime soon.

Fri, 07/11/2014 - 11:33 | 4947183 Manthong
Manthong's picture

..except for the occasional machete uprising.

Oh, wait, it is probably Chinese AK’s nowadays.

 

Fri, 07/11/2014 - 12:12 | 4947309 max2205
max2205's picture

If you're not a Christian it's ok....otherwise you will lose your head

Fri, 07/11/2014 - 13:05 | 4947460 Pool Shark
Pool Shark's picture

 

 

Did anyone consider that maybe the reason a 'Fast food hamburger meal' is $18.95, and a Luxury rental house is $15,000/month in Luanda is becuse these items don't exist anywhere in Angola???!!!

[Supply & Demand...]

Fri, 07/11/2014 - 14:17 | 4947782 TheGardener
TheGardener's picture

Friend of mine spent 5 years of his youth in Luanda with his
diplomat parents. Everything was flown in once a month from home he said, including drinking water. And there was a tank positioned at all times in front of their compound.

Fri, 07/11/2014 - 14:37 | 4947848 CheapBastard
CheapBastard's picture

Are Ebola vaccinations free there?

Fri, 07/11/2014 - 14:11 | 4947762 Stuck on Zero
Stuck on Zero's picture

I've visited a few of these very expensive African cities.  What you are paying for is an element of civilization.  Crime is rampant, electricity intermittent, and clean water is unavailable.  Hotels and luxury condos have water filtration systems, sanitary systems, generators, and armed guards.  These cost.

Sat, 07/12/2014 - 13:34 | 4950110 Monty Burns
Monty Burns's picture

My experience as well.

Fri, 07/11/2014 - 11:23 | 4947153 Stackers
Stackers's picture

Who's up for moving to Angola with me to build trac home McMansions ?

Fri, 07/11/2014 - 11:37 | 4947194 theminister
theminister's picture

I have friends that live there and all I can say is: good luck with that pipedream.

Fri, 07/11/2014 - 13:02 | 4947447 thethirdcoast
thethirdcoast's picture

Yup.

There are probably onerous regulations and endemic corruption that force foreign investors into taking on unreliable local partners who will simply take the money and run at the first opportunity.

Fri, 07/11/2014 - 11:42 | 4947215 johngerard
johngerard's picture

The Chinese aren't remotely interested in colonizing, only in taking the resources in return for money and/or infrastructure, which is usually required to get the stuff out in the massive quantities they want anyway. Dirt tracks don't support massive trucks taking half the country to the docks - which the Chinese will build as well.

The African powers love the Chinese, because they don't attach any sanctimonious bullshit to the deal like "oh, you need more rights for LGBT people, then we'll lend you some money". It's just "here's the money, now fuck off while we clean you out". The Chinese don't give a fuck what they do with it. Why would they? I wouldn't either. If they want to spend it building medical centres for the people - knock yourselves out. Equally, if they want to spend it on an endless round of $20k a night hotel suites in George V in Paris, hookers and blow, and a massive global residential mansion portfolio, what the fuck business is it of anyone else's?

 

So, their country rots? It's up to them. As long as the Chinese get what they pay for, they're done. Oh yes - and don't mess with them - because they will kill you. I think the Africans 'get' that bit.

 

Sat, 07/12/2014 - 13:39 | 4950124 Monty Burns
Monty Burns's picture

It's just "here's the money, now fuck off while we clean you out"

That's because it's the only thing that works.  I know, I tried doing it the 'right' way. The locals don't care if you clean the country out once they get their whack. That applies to 99% of them.

Fri, 07/11/2014 - 11:02 | 4947086 NotApplicable
NotApplicable's picture

Don't worry, we'll have $26 Happy Meals in the US soon enough.

Fri, 07/11/2014 - 11:32 | 4947185 pakled
pakled's picture

Do you suspect they will have a way frowning Ronald Mc D on the packaging? Or will there be packaging?

Fri, 07/11/2014 - 12:30 | 4947361 itchy166
itchy166's picture

But that's ok, because the people working there will be making $15/hr to make them...

Fri, 07/11/2014 - 11:08 | 4947099 eurogold
eurogold's picture

Who would even move to such a shithole ?

Fri, 07/11/2014 - 11:13 | 4947102 alexcojones
alexcojones's picture

One day in the not too distant future,

America will be considered a primo place for both the very richest and poorest expats to migrate to in huge numbers.

Oh wait. The future is now.

Sat, 07/12/2014 - 13:40 | 4950133 Monty Burns
Monty Burns's picture

America will soon be what Brazil is now.

Fri, 07/11/2014 - 11:09 | 4947103 orangegeek
orangegeek's picture

Movin' to the country,
gonna eat a lot of peaches
Movin' to the country,
Gonna eat me a lot of peaches
Movin' to the country,
gonna eat a lot of peaches
Movin' to the country,
gonna eat a lot of peaches

Fri, 07/11/2014 - 12:54 | 4947422 lasvegaspersona
lasvegaspersona's picture

cornbread and molasses

Fri, 07/11/2014 - 17:51 | 4948466 RaceToTheBottom
RaceToTheBottom's picture

We all be sharecroppers for the Massas on Wall Street.

Fri, 07/11/2014 - 11:10 | 4947106 Glass Seagull
Glass Seagull's picture

 

 

Muthafucking Kony.  Must be behind it all.

Fri, 07/11/2014 - 11:11 | 4947112 Urban Redneck
Urban Redneck's picture

FT should really learn the difference between "international standard" and "luxury" they are not interchangeable, sort of like "house" and "housing" aren't the same thing...

Fri, 07/11/2014 - 12:00 | 4947138 Bokkenrijder
Bokkenrijder's picture

I've been to a few African shitholes (N'Djamena, Lagos, Libreville, Kinshasa) and the reason why everything, even of marginal quality, is so bloody expensive is because just about EVERYTHING (from cars and food to cement, bricks, tiles, metal/rebars, appliances, electrical wiring) needs to be imported at a huge cost (Chad for example is landlocked) and the corrupt customs officials need their 'fair' share of the loot. Construction costs to a (semi) Western standard (i.e. it does not fall apart within 2 years) are enormous because these countries (especially Chad) do not produce ANYTHING of value.

I seriously doubt that the bulk of those sky high prices are because of economic development and/or Chinese investment as suggested by this article. The Chinese local spending is minimal (cheap housing and a bowl of rice for Chinese workers building roads, airports, power plants etc in these African countries), and the real spending (=bribes) ends up on Swiss/Singaporean bank accounts, or invested London/Paris/New York/Dubai real estate.

Fri, 07/11/2014 - 12:17 | 4947324 hot sauce technician
hot sauce technician's picture

As Hazlitt was mentioned here a few days ago, his statement that all supply in reality equals all demand seems to corroborate your description. Africans produce little which is why they consume little (at least of low value) hence products, especially those that meet higher standards are scarce and therefore expensive. 

Fri, 07/11/2014 - 13:04 | 4947458 thethirdcoast
thethirdcoast's picture

The construction quality is shit because the local bureaucrats insist that projects hire local construction firms and labor that don't know quality from a hole in the ground.

In fact, most of the ones I've dealt with seem to believe that quality and a hole in the ground are the same thing

Fri, 07/11/2014 - 18:38 | 4948576 luftmensch
luftmensch's picture

Similar situation in Nepal, anything to Western standards is expensive, due to there not being much of it around, and little infrastructure to build/support it.

Fri, 07/11/2014 - 11:21 | 4947147 alexcojones
alexcojones's picture

Guys, we could pool our money and open coffee shop franchises in All those big cities.

Call it Hedge Stars.

$6 for a mutha fucking cup of java.....with "service"?

Better be a lapdance at those prices.

Fri, 07/11/2014 - 11:27 | 4947168 FilthyHabits
FilthyHabits's picture

Though I do prefer a hand job over lapdances, why not start a scheme like where we promise everyone life after death with at least a couple hundred virgins around waiting hand and foot.

 

Wait, didn't some one already do that and make a ton of money?

Fri, 07/11/2014 - 11:26 | 4947164 Oxbo Rene
Oxbo Rene's picture

FUK Africa ! ! ! !

Fri, 07/11/2014 - 11:27 | 4947165 WTFUD
WTFUD's picture

I stayed in Luanda for the best part of a year around 8 years ago soon after the 30 YEAR CIVIL WAR.
There were 2 Chinese eateries; i hear now upwards of 60.

With zero work in Portugal many companies are flocking back looking for contracts. Poor buggers have their arse in the mincer, some expats having to renew their visas every month ( the revenge of the blackman on their colonial masters, haha ).

Anyway the most interesting fact other than the still live landmines planted by South Africa which outnumber the population of approx 15 million IS THAT THE FUCKING OIL DID NOT STOP FOR ONE DAY throughout that 30 year period.

40% USSA 30% CHINA

NOTHING CHANGES

Fri, 07/11/2014 - 11:30 | 4947175 Colonel Klink
Colonel Klink's picture

Uh, please do the next article on the cheapest places to live for expats.

Fri, 07/11/2014 - 12:53 | 4947416 DoChenRollingBearing
DoChenRollingBearing's picture

Yes!  I second the motion for the cheapest places to live for expats, including the costs for similar products (services) as above: rental, food, coffee.

Many ZH-ers would be interested to at least read that article...

Fri, 07/11/2014 - 11:30 | 4947179 johngerard
johngerard's picture

A few years ago, when sitting in Dalaman airport in Turkey, I wanted to spend the last few Turkish Lira I had.

So I went to the McDonalds to have a look. The price of a Big Mac and Fries? 

US$19.

I thought "hmmm...I'm not really that hungry."

A Snickers bar in the shop was US$7.

Fri, 07/11/2014 - 12:58 | 4947437 DullKnife
DullKnife's picture

"A few years ago, when sitting in Dalaman airport in Turkey, I wanted to spend the last few Turkish Lira I had.

So I went to the McDonalds to have a look. The price of a Big Mac and Fries? 

US$19.

I thought "hmmm...I'm not really that hungry."

A Snickers bar in the shop was US$7."

===============================================================

Congrads, you have just discovered the reason for poverty there.

After a local buys a Happy Meal, he/she is penniless and poor with no money in the wallet.

High prices cause poverty :-)

DK

Fri, 07/11/2014 - 13:29 | 4947574 TheAnswerIs42
TheAnswerIs42's picture

See the Economist Big MAC Index.

Turkey is currently undervalued (cheaper) by almost 19% compared to the US.

The winner is Norway at 68% over value...

 

Fri, 07/11/2014 - 17:56 | 4948483 RaceToTheBottom
RaceToTheBottom's picture

That is because Norway passed Switzerland as the most responsibly managed currency.  All that Norway Oil money held and managed for the future not their financier's present.  

That and the Swiss bolted their currency to the Euro...

 

Fri, 07/11/2014 - 13:19 | 4947199 pakled
pakled's picture

Is there really any place to go where you can be highly certain that door #2 is any better than the door #1 you live at now.

 

Someone needs to invent a solar powered aircraft that allows one to stay in flight nearly full time. Land for goodies now and then as they appear on the horizon.

 

Either that or an HG Wells time machine. The Eloi won't give you much trouble. Just don't try and go spelunking.

Fri, 07/11/2014 - 17:59 | 4948489 RaceToTheBottom
RaceToTheBottom's picture

http://www.nasa.gov/centers/armstrong/news/FactSheets/FS-034-DFRC.html#....

It could be like that cruise ship called "The World" or something like that.  

Comes complete with a english speaking TATU "The Plane, The Plane"

Fri, 07/11/2014 - 11:50 | 4947236 Devon
Devon's picture

I have worked in Luanda for the last 2 1/2 years, been coming here since the late 1990's. The growth rate is huge, and much of Luanda looks like a building site. Plenty of time to admire the place as you can spend hours stuck in traffic. 

Most notable has been the amount of Portuguese moving down over the last 3 years, can't think why? Oh sorry yes I can those fuckwits in the EU and the Troika. 

The Angolan governemnt make (long term) visas very difficult to get and the company have to prove that a local can't do the job, you have to employ locals for each ex-pat, pay the right taxes. Employment rights are good for the locals also and it isn't eay to hire and fire.

Anyone who comes up with that reverse racism that we (yes I work for an oil field service company) can just throw them some glass beads and bribe our way past the dumb locals knows fuck all about Angola, there are some very sharp cookies down here.

One last thing, yes it is fucking expensive if you want to go out to a safe place to eat and drink, and you need to be central for security and/or not wanting to spend hours in their legendary traffic jams which makes apartments/hotels very pricey.

Fri, 07/11/2014 - 11:58 | 4947273 WTFUD
WTFUD's picture

Angola has a similar oil production with Nigeria and with only an estimated 10% of population you would guess a huge middle class; Guess Again!!!

The Oil production is in Cabinda which is actually Congo but HEY.

President Dos Santos studied in Russia and married one, 2nd wife.

During civil war with Unita , Lev Leviev ( Russian Jew ) dropped food parcels into the jungle for ruling party and now receives pick of DIAMOND concessions ( best in world, Lunda Norte ); outranking Debeers.

The females sit around ALL day watching SHITTY Brazilian Soaps but dance well and fuck all night.

Of the $20 billion ( 2 times $10 billion Phases ) invested initially by China Import/ Export Bank for reconstruction( backed by Oil ) $4 billion went missing immediately with the Min. of Finance sacked.

Fri, 07/11/2014 - 12:03 | 4947288 TabakLover
TabakLover's picture

Betcha hookers are cheap in A-freek-a.

Fri, 07/11/2014 - 19:11 | 4948644 are we there yet
are we there yet's picture

Aids is common in Africa, bargan hookers may cost you your immune system.

Fri, 07/11/2014 - 12:12 | 4947310 NoWayJose
NoWayJose's picture

Interesting to see these costs in dollars - you know it will only get worse.  Actually, except for the rent, many of these prices are common street prices in Anytown USA - today!

Movies - easily $12 plus $6 for a popcorn

Coffee - (especially with service) - $5 at Starbuck plus a $1 tip into the jar

Burger - Any 'value' meal for a big burger is going to be up near $8 or $9

 

Fri, 07/11/2014 - 13:06 | 4947467 DullKnife
DullKnife's picture

BTW, years ago (last trip to south China), the local city (pop est 50k at the time), had one McDonalds.  It was jam packed with Chinese.  Prices a little higher than USA McDonalds.   Because all the food had to be imported from USA.   But the young people loved it.  Novelty.   

So prices were high.  But local ethnic Chinese restaurants were IMHO better (Chinese) food at lower prices.

DK

Fri, 07/11/2014 - 12:21 | 4947340 slightlyskeptical
slightlyskeptical's picture

This is all bs. Yes they may be expensive in various ways, but people who rent luxury apartments generally do not buy "happy meals".

Fri, 07/11/2014 - 14:56 | 4947908 TheGardener
TheGardener's picture

Real food might not cost that much ,but colonizing expats squatting on shore in luxury accommodation will long for shitty branded fast foods.

Sick parallel world, kind of keeping your spaceship afloat in a dense atmosphere while conquering a new planet.

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